10/27/17 was down -0.15 to 69.04. The ZZZs are now trading at a discount of -4.18 to the component. Traders have decided that the CME Lean Hog Index is going to drop a little before we get to cash settlement.

The six-day moving average carcass weight firmed to 211.71#. Hogs seem to have now entered the more rapid fall finishing period and this is pushing the carcass weights up. The weights this morning were only +0.03# yr/yr meaning there is no real difference between this year and last year. Packers are finishing their hogs +1.28# heavier than non-packer hogs.

A new category of index is now being reported by the USDA, "Negotiated Formula" hogs. This means I am going to need to rebuild my model to include these hogs. Consequently there may be a slight variance between my numbers today and what the USDA will report. I think the variance will be small since the number of hogs in this category is fairly small.

STill long the ZZZs and short 67 calls.

Best wishes,

dhm