8/15/17 was ddddddddddown $0.91 and the model projects that the component on yesterday's kill will shed between -0.45 and -0.75. It appears that packers are getting serious about getting their cost of pork down. Or maybe they are wanting to widen their margins. Cutouts are holding up quite well being +16.75 higher than one-year ago. I noticed that one-year ago today cutouts tumbled by -2.21.

Wiith their lower bids packers purchased 94.9% of the moving average daily purchase of Index hogs and 989% of the moving average daily purchases of total hogs. Hogs are continuing to move well but the producers may be falling behind just a tiny bit in their shipments.

The VVVs are now trading at a very wide discount of -13.19 below the component.

What does all of this mean?

It means that traders are going to be jumping at shadows trying to figure out how that extra-ordinary "Gap" will get closed. I believe traders who make momentum trades either from the long are short side can make money as hogs jump up and down.

I believe scalpers who look for Trend Line reversal trades will make money by getting in and out when the momentum traders either get stopped out or take their profit

I believe position traders who are long the VVVs can hold on and they will see a point or two of profits as the "Gap" gets closed by rising VVVs.

I believe option traders who sell out of the money puts will see the puts go worthless and they will get to keep the premium.

I believe option traders who sell at the money calls will be on the short end of the stick unless they cover them with a long VVV future.

I believe those short the VVVs may have an opportunity to cover their shorts with a profit but if they hold to cash settlement they will probably cough up a point or two of their margin.

I believe I had better stop pontificating now and tend to my knitting.

Best wishes,

dhm

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