11-16-16 was down -0.01 to 48.01 which really amounts to being unchanged. The ZZZs settled discount to the component today by -0.61. That is really no "Gap" at all. There will be a strong tendency for the futures and the CME Lean Hog Index to go forward in lock-step but I anticipate that the futures will be quite volatile due to the uncertainty about the inventory of market hogs producers have as well as how strong demand will continue to be.

After the hogmarket closed today, the cut out report showed a big drop in the price of hams and bellies. Hams and bellies together comprise a large portion of the hog carcass so this is not good news for the producers.

The six-day moving average carcass weight today came in steady at 216.62#. That is -2.35# year/year. Packer hogs are +3.48# heavier than non-packer hogs. Index hogs are lighter at 210.51#. So far this week the kill rate is a little weaker than projected from the last H&P Report. I will be watching to see if this indicates that producers have pulled hogs forward and there is going to be a small "Hole" in shipments now. It there is a "Hole' it would appear that packer hogs have backed-up a little so they could have enough hogs to fill any hole that develops.

The afernoon reports seemed to show that packers were bidding strong for hogs today.

Today I made several scalping trades and am short one less ZZZ pigs than I started out the day. If I get a good chance on
Friday, I will take off some more of them.

Best wishes,

dhm