9/24/14 was $0.76 and the model projects that the component on the 9-24-14 kill will move up between +0.50 and +0.80. The VVVs were premium to the CME Index component by 0.71 at yesterday's settle. That premium is now erased with the VVVs being down and when the 201 report comes out, the VVVs may be discounted to the component by as much as a buck. It just might be that traders are giving the VVVs too much of a hair cut this morning.

Packers were able to get a solid purchase of hogs yesterday but the number of index hogs purchased was on the weak side even though the Purchase Index (which is a measure of the prices paid for CME index hogs) was up nearly a buck. It seems to me that the index hogs are the ones that are on the cutting edge of price discovery. Since packers were paying up smartly for them. it may be an indication that they are in mildly shorter supply or else packers are having to rely on them to meet their slaughter needs.

This may be suggesting that traders are taking too much off the VVVs this morning.

I didn't buy a VVV pig when they were down at 106.25, but I wish I had and I will if they retrace to that level.

Best wishes,

dhm