11/21/17 was down -$0.20 and the model projects that the component on yesterday's kill will ease between -0.20 and -0.50. The ZZZs are trading discount to the component by -3.47. I think there is a good chance that most of the "Gap" closing will come from packers lowering what they are paying for hogs. I say that because:

1. Carcass weights are running more than 2.0# heavier than one year ago suggesting that packers have backed hogs up a little.

2. Cutouts are showing some weakness and that makes packers cranky.

3. The Index has been in a down-trend for some time and trends tend to continue until they reach exhaustion.

This feeling is subject to a quick change in any of the above factors no longer hold true.

I am long a few ZZZs that are protecting some short calls.

Best wishes,

dhm