liquidate hogs before the VVVs expire and they will get their inventory of market hogs down to a manageable level by the time the ZZZs become the front month. If that happens, ZZZs could show some life. The H&P report next Friday may give us an idea of what the kill rate will look like over the next couple of months.

Packers were really wanting to get rid of the product today. They dumped close to 500 car loads of cutouts and trim. I haven't seen them move that much in one-day for a long time. In the process, bellies really got thumped again.

From the afternoon reports the model projects that the Purchase Index will drop by -$1.21 and the component on today's kill will continue down hill to the tune of something like -0.80 to -1.10. If packers don't scare up some demand from someplace, this will start to look like the fall of 1998. That year the index didn't really hit the skids unto the early part of October.

Mostly I just report to you all the numbers from the USDA and how they look when they run through the Hog Pricing Model. By doing that, you all can make your own interpretations of their meaning . I have a little difficulty constructing a bullish scenario when I see the kill running nearly 500K below projections from the last H&P report and the 6-day moving average carcass weight running 1.26# heavier than last year. Then, by inference from the way packers were selling the cutouts today, demand contracted significantly.

I still hope your producers are well hedged.

Best wishes,

dhm