9/2/16 was down -0.18 to 64.51. There was not as much weakness as the model had projected but it was still enough to keep the down-trend alive. The VVVs are now trading discount to the component by -5.71. That is quite a discount but it is only one addictive move according to ITZ. With cool weather and fresh corn on the way, there could be some increase in the kill rate that could pressure prices a little. Cut-outs were not that great on Friday.

The six-day moving average carcass weight moved up to 208.11#. That is -1.03# year/year. Packer hogs were mildly lighter and non packer hogs got heavier. Packer hogs are now +0.36# over non-packer hogs and Index hogs continue to trail at 207.15# although they were a bit heavier this morning.

This is turning out to be one of those rare occasions when I get a directional bias and it works in harmony with the way the market is moving. I'm still short the VVVs. I was able to cover several short V/Z spreads this morning at my profit target. Spread trades have been active this morning. I just bought a N/Q spread at 0.675. It may take some patience to get that one off my boat but there is lots of time left for it to work. If it drops lower, I will add another one or two.

Best wishes,

dhm