8/31/16 was down -$0.32 and the model projects that the component on yesterday's kill will drop between -0.20 and -0.50. With their lower bids packers were able to purchase 90.9% of the moving average daily purchases.

The kill this week is coming in a bit weaker than projected from the last H&P Report. And for the past week the six-day moving average carcass weight has been steady. It is possible that producers have shipped their hogs fast enough over the past six-weeks to partially off-set the increased kill that generally occurs this time of the year. My bias is that producers still have enough hogs to supply the packers with their needs at this price level or a bit lower.

So I am mildly long the VVVs and as is generally the case when I get a directional bias, I make a greaaaaat fade!!!

The firm pre-opening bids suggest that is the case again this time around.

Best wishes,

dhm