10/27/17 was up just about as expected at +0.49 for an index component on yesterday's kill of 69.19. The ZZZs are now trading discount to the component by -4.79. If there is some follow-through to the weakness in the Purchase Index that we saw yesterday, it is easy to imagine that the Index will collapse enough to close that "Gap". The jump in the cutouts that we saw yesterday is not suggesting that demand is weakening. Continued high pork production could cause the cutouts to soften a little.

The 6-day moving average carcass weights moved up to 211.45#. That is only -0.34# year/year. Index hogs pwere also heavier at 211.21#. Maybe hogs are now finishing faster and that will make more pork available. Packer hogs are continuing to be heavier by +1.24#.

The numbers are hinting that the up trend is ending and I have two long ZZZs that I didn't take profits on but should have. To correct the folly of my ways, I sold some Dec 67 calls at 1.00. That will give me a little cushion in case there is continued weakness.

The calendar spreads are fairly active for me again today.

Best wishes,

dhm