8/25/17 was down -$1.08 and the model projects that the component on Friday's kill will drop between -0.85 and 1.15. Packers are continuing to hammer the price of hogs lower and lower. In spite of their lower bids, packers were able to purchase 123.2% of the moving average daily purchases of total hogs and 116.6% of index hogs. This suggests to me that producers are becoming quite motivated sellers as prices collapse.

Cut outs continued to fall dropping 0.77 with bellies leading the way down with a decline of -2.22.

The VVVs settled discount to the component by -14.5. The model calculates that the component will need to drop an average of 43.3 cents per day to close that "Gap". Over the last nine days it has dropped an average of -64.6 cents per day. That's a huge "Gap" but packers know how to close 'em.

Still mildly short the VVVs and not as nervous about the trade as I was last week..

Best wishes,

dhm