8/29/17 was down -$1.96 and the model projects that the component on yesterday's kill will decline between -1.15 and -1.45. The down-trend is continuing - in fact it seems to be gaining momentum. The VVVs are now trading discount to the component by -14.74. The component will drop a little and the VVVs follow suit keeping the "Gap" at an extra-ordinary wide level. I keep thinking the VVVs are due for a bounce and will try a scalp from the long side and get stopped out. I do keep my stops very close so the loss is not material and I continue to be a tiny bit short of the VVVs.

Yesterday packers purchased 97.5% of the moving average total hogs and 97.9% if index hogs. Producers seem to be plenty willing to sell hogs in the face of very large bid cuts by packers. My read is that they need to because they are falling behind on their shipments as manifest by the climbing carcass weights.

The price of Cutouts continue to erode-away and it is especially the bellies that are pulling them down. Bellies have dropped -78.83 since 8/7/17. That's one INDUSTRIAL-STRENGTH wash-out.

Just bought a long VVV pig. Now to see how that scalp works.

Best wishes,

dhm