10/20/17 was up +$1.33 and the model projects that the component on Friday's kill will jump between +0.95 and +1.25. With their higher bids packers purchased 134.1% of the moving average daily purchases of total hogs and 123.8% of Index hogs. Packers were able to sell pork at better prices on Friday and they chose to pass along most of the gains to the producers.

The ZZZs are tending to move in lock-step with the index but there is so much time left until we get to cash settlement that this close relationship may not hold. The kill last week was -1.56% below the same week one-year ago. With the firm packer bids Friday, I'm scratching my head and wondering, "Is the supply of market ready hogs getting a little tight?"

The last H&P report did not seem to suggest there would be a short supply of market hogs this fall. The 6-day moving average carcass weights are-0.25# year/year so it appears that producers are quite current in their shipments.

I surely don't have a strong directional bias but I'm inclined to try to scalp from the long side.

Best wishes,

dhm

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