There was nothing fancy to report in volume and open interest from the livestock trade yesterday. Hogs traded lower for the second consecutive session as the down trend reasserts itself. Traders should be prepared for a test and likely penetration of contract lows today. The weekly kill is projected to be 2.475 million hogs, up over 7% from last week and up nearly 7% from last year. Last week the pork cutout was unchanged in the face of a disrupted kill that backed up over 100,000 hogs. This week the cutout likely won’t hold with loins already showing weakness yesterday. We are short Dec futures, short through the summer months with our producer/hedgers and long a host of Dec puts for our spec crowd. There’s a very real chance that packer slaughter capacity will be challenged at some point from late Oct to late Nov. Are you ready?

Have orders in to sell some Feb & April but not filled yet. Holding all the Dec shorts!

Dewey