11/15/17 was down -0.59 to 65.74. That is a little more weakness than the model projected but at least the model was pointing down. I sold a ZZZ pig on the opening blip up and took a nice ride down hill this morning. The ZZZs are now trading discount to the component by -5.60. That is quite a "Gap" considering how close the ZZZs are to cash settlement. Packers are producing a lot of pork this week and yesterday they had plenty of trouble getting it all out the door.

The six-day moving average carcass weight moved up to 212.91#. That is +1.29# yr/yr. Index hogs were also heavier at 212.67#. Packer hogs were heavier by 0.63# and are now heavier than non-packer hogs by 1.29#. These number are suggesting to me that hogs have been backed up a little. If that is the case, the stage may be set for the "Gap" to be closed by the Index taking a dip rather than the ZZZs mounting a rally.

Have bought quite a few M/N spreads and a few G/J spreads and now I am asking myself, "Why did you buy more G/Js when you already have a bunch on the boat?"

Best wishes,

dhm
dhm