Same cash outlook on a different day, different week. Look for lower cash hog prices during the course of this week. Cash was down .50 yesterday with the slaughter huge and cutout holding steady. The result was another improvement in pork packer processing margins in the face of sharply lower lean hog futures. Technical damage was incurred yesterday with fresh contract lows in all contracts except Oct on moderate volume (36,000) and rising open interest (up 1,800). Open interest dropped off hard in the Oct contract but it was higher in the next eight contracts. We will post our downside target basis the Dec hogs in tonight’s evening livestock wire. It’s rather shocking how weak the deferred contracts have become, especially the summer 2017 hog contracts. What the market appears to be digesting is the idea of global expansion in pork production. We’re referring to expanded production coming down the pipe in China, Brazil, and Russia as well as in the U.S. Look for a lower performance again today.

I am nervously Short!
Dewey