8/22/18 was down -0.09 to 86.15. The NNNs are now trading discount to the component by -7.42. That is quite a "Gap". On average over the past seven years the "Gap" has been -2.68 on this date. The seven year low "Gap" for this date was -7.09 posted in 2012. For the past few days the component has come in weaker than the model projected. Maybe this means that packers did not have as many expensive hogs in the pipeline as the model calculated. Whatever the explanation, the model did project weakness and that was sufficient to get me on the short side of the NNNs and benefit some from today's weakness.

The 6-day moving average carcass weight eased to 208.82. Index hogs were also a bit lighter at 208.20#. That is +1.35# yr/yr. Hog just don't finish as quickly in this hot weather.

The data is showing that packer are owning larger and larger percentage of the daily kill hogs.

I piled some long Q/V spreads on my boat today but it is definitely NOT over loaded. .

Best wishes,

dhm.