9/12/17 was down -$1.29 and the model projects that the component on yesterday's kill will crash between -0.80 and -1.20. Packers are in a pretty sour mood as they watch the cutouts plummet being led lower yesterday by another drop of -4.48 by the bellies. There is a huge "Gap" of -8.58 with the VVVs under the component but a lot of closure takes place when the Index drops the way it has been dropping. It have dropped an average of 88.5 cents per day for the last 19-days. That rate may increase after today's number get fed into the mix.

The six-day moving average carcass weight is +1.77# year over year. It looks for all the world like producers have fallen behind in their shipments. The model project the back log of hogs is nearly 500K. With two new plants coming on line, those hogs will be kill, that's for sure.

But -

More pork being produced does not translate into higher prices.

Not at all!

In fact more pork translates into lower prices and the only brick wall out there to stop the decline in pork prices will be increased exports. The model is completely helpless is trying to give me any guidance in that regard. So I will have to muddle along talking hogs much better than I trade them.

With their lower bids yesterday, packers only purchased 83.9% of the moving average daily purchases. I think they are just not wanting more pork to have to peddle.

Best wishes,

dhm