10/23/17 was up +$0.55 and the model projects that the component on yesterday's kill will move up again, this time something like +0.70 to +1.00. The dip in the ZZZs yesterday opened the "Gap" to -2.08 with the ZZZs being discounted to the component.

This is the time of the year when carcass weights tend to be getting heavier as fresh corn begins to roll and hogs' appetites improve with cooler weather. It isn't happening much this year. Yesterday the 6-day moving average carcass weight was -0.58# year/year. This makes me think that producers are very current in their shipments. At the same time cutouts held up yesterday with hams and bellies holding firm. It is possible that the weakness of the ZZZs yesterday was a technical/emotional move that will not hold today. The firmness of the Purchase Index and projected rise in the component on yesterday's kill seems to confirm this feeling.

I ended yesterday with some long scalping trades. Last night I was a little nervous about them but feel better now that I have some more data to support the position. I may add to the long ZZZs this morning if the price is right and I don't get too busy working calendar spreads.

Best wishes,

dhm