9/26/27 was down -0.75 to 55.87. Oh! My! The model missed and the component came in outside of the projected range - - - but not by much. The VVVs are now trading discount to the component by a mere -0.60. Today marked the 30th consecutive down day for the component with an average daily drop of -92.0 cents. I hope there were a lot of producers that have been very well hedged. We are now down to 12-days of data to get us to cash settlement. This down trend is so powerful that I am suspecting it will push the VVVs even lower. It seemed just out of character for the market to post a strong opening so I pulled a "Dewey Trick" and sold 15. I have now taken profits on 7 and will ride with the other eight for a while.

The 6-day moving average carcass weight firmed to 210.87#. That is +1.06# yr/yr. Index hogs were a bit lighter at 209.84#. Packer hog weights were nearly unchanged but non-packer hogs were +1/4#. Packers may be staying more current than the non-packers.

Relative to the H&P report, I will be most interested in the 180# and up category. From the last H&P report, it would appear that the number should be +3.25% to +3.50%. If it comes in lower than that it may mean that that log-jam of hogs I have been talking about really does not exist. Even if there is no log-jam, there is weak demand or at least weak enough to see cutouts dribbling lower day-after-day and bellies have just collapsed!

Any way you look at it, we are in the chase trying to find the "Valley" to this Hog Cycle. With my excellent 20:20 hind-sight vision, I know where the "Peak" was and someday I will probably know where the "Valley" was. But for today I just have to guess. I don't think we hit the "Valley" today for the CME Component. Cut outs are too weak and hogs too plentiful for that.

Best wishes,

dhm