8/18/17 was down 0.54 to 82.93. The "Gap" is now a very wide -17.23 with the VVVs at a discount to the component. That is a mighty wide "Gap". It would not surprise me to see either the packers or the retailers step in and start buying hog futuress at this price level...

The six-day moving average carcass weight firmed to 207.51. That's +0.63# yr/yr. It just seems to me to be out of character for carcass weights to be going up in August. Is it possible ITZ, that packers have slowed down the chain speeds perhaps to back hogs up a bit and break the price? The futures price is already broken and now they may be wanting the cash hogs to follow??? Packer hogs are now +0.26# heavier than non-packer hogs. Index hogs are at 207.44#. That is also up a little.

The model is calculating that the component will need to drop an average of -0.43 per day to close the "Gap". That's really a lot of price trimming by the packers but they will get the job done if their margins begin to squeeze. That didn't happen yesterday with cutouts being up a little and their bids a little lower.

I am flat the VVVs for the weekend but have loaded a few more calendar spread onto my boat. It has been riding mighty high in the water.

Best wishes,

dhm