8/24/17 was down -1.09 to 77.66 cutting the "Gap" to -14.63. The component has lost an average of 64.7 cents per day for the past nine-days. If that trajectory continues, the cash settlement index for the VVVs will be 58.11. The model calculates that the component will need to fall an average of -0.44 to close the "Gap". Either way that is a lot of down-hill movement. The combination of very weak fundamentals in the face of a huge "Gap" has me nearly side-lined with the VVVs but I am mildly short.

The six-day moving average carcass weight moved up to 208.15#. That is +0.71# year/year. Index hogs were also heavier at 208.03#. It continues to look to me like producers are falling behind in their shipments. All those heavier hogs WILL come to market eventually and if China begins buying, they may be marketed at a price somewhat above where we are now.

Best wishes,

dhm