10-9-14 was down -0.45. That is somewhat more than projected by the model. Obviously packer chose to kill some less expensive hogs which dumped the component more than expected.

Yesterday the number of hogs packers purchased was rather puny. Maybe they didn't want very many hogs so they bid lower.

Maybe producers were balking at the lower bids. It is risky for producers to hold back hogs this time of the year because the kill rate has a strong tendency to increase and the last H&P report seems to indicate that could happen this year because the 120# to 179# category of hogs is about to come to market and their numbers are higher.

Packers' margins seem to be favorable so it may not be soft demand that is pushing the packers to lower their bids.

The six-day moving average carcass weight moved up to 213.68# and it was almost entirely driven by heavier packer hogs.

The VVVs are now discounted to the component by -0.87 with three-more days of data to come in. Never have I been so neutralized about the front month futures as I am this time around. With the Purchase index and the CME Index being in down-trends now, I'm more inclined to be short VVVs but am flat right now.

Best wishes,

dhm