11/16/17 was down -0.42 and the model projects that the component on yesterday's kill will drop between -0.25 and -0.55. The ZZZs are now trading discount to the component by -5.57 with 17 trading days until we go to cash settlement. That is quite a "Gap" this close to cash settlement. I have a hunch that the ZZZs will participate in the "Gap" closing waltz by adding a point or so. The fact remains, though, that hogs are in a down trend and packers barely maintained the price of cutouts yesterday.d

With their lower bids, packers only bought 77.9% of the moving average daily purchases of total hogs and 88.7% of index hogs. Perhaps packers had most of the hogs purchased that they were wanting and that enabled them to bid down for hogs.

Best wishes,

dhm