9-22-14 was UP +1.06 to 106.32. The firmness of the VVVs has bumped their premium to the component up to +2.10. The low kill rate coupled with the strong cut outs is a prescription for building a fire under the CME Index and the traders are sensing this and bidding the VVVs higher.

The 6-day moving average carcass weight eased to 212.54# and the yr/yr change is now down to 7.84#. Packer hogs were somewhat lighter than the non-packer hogs. Packers seem to be moving their hogs to market at a fairly brisk clip. It is difficult to tell whether this is to beat an anticipated decline in price or whether it is a move made necessary by a lack of non-packer hogs. Considering the low kill rate, my bias is that it is driven by a shortage of hogs.

This counter-seasonal price rise has me mostly watching the VVVs as a by-stander. Often some of my best trading occurs when we get close to cash settlement and I can use the Hog Pricing Model as a trading tool. Having had a computer problem has temporarily neutralized the Hog Pricing Model.

Best wishes,

dhm