10-17-14 was down 1.70 to 105.97. Packers are getting serious about getting their cost of product down. I can't really blame them considering the skid downhill that the cut outs are taking.

The ZZZs are now discounted to the Index component by 16.12. Generally there is a decline in the index this time of the year but not usually nearly that much.

But packers are not usually paying more than a buck a pound for carcasses, either. On average, between now and expiration of the ZZZs, we get an 8.6% drop in the CME Index. That would put the cash settlement index for the ZZZs at 96.85.

But this is not an average year.

This is an extra-ordinary year the likes of which we seldom see. So we continue to wild guess where the ZZZs will settle to cash.

The six-day moving average carcass weight moved up to 214.70# and the packer hogs gained way-more than the non-packer hogs. My guess is that packers have more empty pens than non-packers, so they are holding hogs back a little and still making money with corn being cheap.

I have been able to scalp a ZZZ this morning, but nothing exciting. Just enough to keep my mind active.

Best wishes,

dhm
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