8/30/17 was down -1.28 to 72.90. That, together with the strength of the VVVs has cut the "Gap" to -10.90 with the VVVs being at a discount to the component. Over the past 12-days the component has dropped an average of -88.2 cents per day. If that rate continues, the cash settlement index for the VVVs will be 47.08. The model calculates that the component will need to drop an average of 39.5 cents per day to close the "Gap". The down-trend is so powerful that I am inclined to think that most of the "Gap" will be closed by a slumping index. But the VVVs could easily tack on a point or two. The big "Gap" has me almost afraid to get long or short but I continue to be a tiny bit short..

The six-day moving average carcass weight firmed to 208.59#. That's +1.10# year/year. Index hogs are a bit lighter at 207.89# and that was up a little. It just looks to me like producers are getting a big behind in their shipments. Packer hogs are a bit heavier at +0.21#. Those hogs that are not being killed now will get heavier and could burden the market when they do keep their appointments with the packing plants.

Still a tiny bit short. Have been able to make a few scalping trades this morning.

Best wishes,

dhm