Cash was lower on Thursday, expected to remain soft today and then lower again next week. Excessive supplies of butcher hog supplies is the theme moving into next Friday’s quarterly hog & pig report. The report is very unlikely to contain any bullish news. The pork cutout has dropped hard for two consecutive days. The cutout performance has been choppy. If the cutout drops hard again today it would be a departure from the current trend and suggest the huge slaughter is finally overwhelming demand for pork. My product sources are suggesting that cutout will NOT hold. If correct, traders should brace for lower cash, lower cutout and lower futures down the road. We sold Dec hogs yesterday, adding to our short Oct positon which includes a host of puts. Oct posted a fresh contract low and new low settlement yesterday. This bearish action strongly indicates the downtrend will continue today.

I am short several Dec hogs, and have orders in to sell more but I doubt they get to my price.

Dewey