9/7/17 was down -0.63 to 68.63. The VVVs are now trading discount to the component by -7.05 with 25-days of data to get us to cash settlement. Over the past 17-days the component has dropped an average of -87.4 cents per day. The model calculates that it will take an average daily drop of 0.32 to close that "Gap". Only once in the last 17-days has the component dropped less than 0.32.

Cutouts were down again yesterday. Bellies may have found a short-term bottom but the whole carcass seems to be continuing to erode away.

The 6-day moving average carcass weight firmed to 210.27. That is +1.71# year over year. I worry that this is signaling that producers are getting behind in their shipments and hogs are being backed-up. Both packer and non-packer hogs were heavier by about 1/2#. Packer hogs are running about a half-pound heavier than non-packer hogs.

Sold another handful of VVVs this morning. Now to see if I can successfully scalp out of them.

Best wishes,

dhm

t/