11/10/17 was down 0.44 to 66.81. The ZZZs are now trading discount to the component by -4.46. "The Market" continues to be bearish the front month hogs. The down trend is strong enough that I am staying short the ZZZs. Don't like to fight a trend especially a down trend in the fall.

The 6-day moving average carcass weight moved up to 212.75#. That is +0.95# yr/yr. Index hogs were also heavier at 212.84#. Packer hogs are +0.56# heavier than non-packer hogs. Hog carcass weights often rise this time of the year but the fact that they are about a pound heavier than last year may be telling us that packers are slowing their chain speeds a little causing hogs to be backed up some. The kill is running a bit less than projected from the last H&P report. With the kill running less than projected, there are two possible explanations:

1. The USDA missed on their hog count and there are actually fewer hogs in producers barns than USDA reported or

2. Hogs are being backed up.

Since carcass weights are heavier than one-year ago, I think the more likely scenario is that hogs are being backed up a little.

If the hogs are in the barns, they WILL come to market.

And they will be heavier.

Exports of pork may be critical in order to keep the price of hogs from taking a nose dive if more hogs are in the pipeline and they have to come to market.

I added a tiny bit to my short ZZZs today.

Calendar spreads have kept me quite busy this morning some G/Js coming and going and making some trips to the bank with the profits from selling some long M/Ns.

Best wishes,

dhm