10/19/17 was WAY UP at +1.11 and the model projects that the component on yesterday's kill will be up between +0.80 and +1.10. Packers' appetites for hogs was very strong again yesterday. With their higher bids they only purchased 83.0% of the moving average of total hogs and 91.2% of total hogs. It "Feels" like market-ready hogs numbers may be a little weak so packers are laying the money on the Index hogs to entice them to come in. Pork production is strong and demand seems to be matching it. I say that because cutouts ticked higher yesterday.

The ZZZs settled premium to the component by a paltry +0.50. Traders seem to be watching the index component and not getting very far from it. If they continue that pattern, when the 11:00 report comes out, the ZZZs may bounce a little to a keep the "Gap" closed.

I decided to probe the long side of the ZZZs this morning when they dipped. My conviction is not very strong so I may be out of them in a hurry. The confusion about market direction is keeping the spreads jumping around so I am getting a goodly number of them on and off my boat.

Best wishes,

dhm