9/8/17 plunged by -1.09 to 67.54. The VVVs are now trading discount to the component by -6.04. That is quite a "Gap" but a lot of "Gap" gets closed when packers take of a point a day like they did on Friday. On average over the past 18-days the component has dropped 88.6 cents a day. That is serious price cutting by the packers. The model now projects that it takes an average decline of -0.29 per day to close the "Gap" by the time we get to cash settlement.

The six-day moving average carcass weight moved up to 211.15#. That is +1.78# year/ year. Index hogs were also heavier at 210.49#. Packer hogs were heavier by 1/2# and non-packer hogs were heavier by 1.5#. That is a lot of one-day weight gain on a six-day moving average.

The data continues to suggest that producers are getting behind in their shipments of hogs. I can't help but think that is a bad idea with cooler weather coming on and fresh corn about to start running through the hog feeders causing even faster weight gains. As I look at the way cutouts are tanking, it is easy to understand why packers are not wanting to increase the daily production of pork very much. On 7/24/17 bellies were quoted at 215.68. Friday the number dropped to 115.16. That is a serious price decline that has to be getting packers' attention and making them a bit grouchy.

On Friday I took one-bravery pill and added three short VVVs to the mix. Today I have made a couple of scalps from the short side and timidly added three more short VVVs. And so the pattern of talking hogs better than I trade them continues. If I had spine to really trade what the data has been telling me, I would have come through the weekend with a dozen short VVVs with a dozen more piled on when today's data came in bringing my total to a Dewey-sized load of short 25. There are not enough Tums in my medicine cabinet to enable me to do that!!

Best wishes,

dhm