8/31/17 was down -1.05 to 71.86. The VVVs are trading discount to the component by -10.26. That's quite a "Gap". The model calculates that the component will need to drop an average of -38.1 cents per day to close that "Gap". Over the past 13-days the component has dropped an average of -0.89 per day. If that rate were to continue, the cash settlement index would be 48.55. I don't think for a minute that it will drop that much. It does appear, though, that packers have slowed down their chain speeds and producers are a little behind in shipping hogs. I arrive at the conclusion because carcass weights are going up and the fact that the are +1.11# heavier than one-year ago.

The six-day moving average carcass weight today is 208.74#. Index hogs are a bit lighter at 207.99# but that is up a little from the day before. Packer hogs are +0.47# heavier than non-packer hogs.

Still a bit short the VVVs.

Best wishes,

dhm