10/28/14 was down -$1.93! Packers are going to work doing what they need to do to get their cost of product down and maintain some margin for themselves.

The model projects that the CME Index component on the 10-28-14 kill will drop between -1.45 and -1.75.

Last night the CME Index component to ZZZ futures "Gap" settled at 5.16. When the 201 report comes out, in all probability the "Gap" will drop to something like 3.50, unless of course the ZZZs do something funny. That's not much "Gap".

On average over the past 10 years the CME Index has tacked on 0.25 between now and cash settlement. That is essentually saying it remains unchanged on average. Averages may not mean much. In 2009 the index posted a 10.73 gain and in 2013 it dropped 6.98.

One thing is for sure - -

This is not an average year!!

Looking at the way producers are hurrying hogs to market, the index may drop too much and will end up posting a rally as we move toward cash settlement.

Right now I'm trading the down trend in the Index and carrying a short ZZZ position. I'm watching to see if the data will give me a hint when it is time to shift gears and start a long campaign.

Best wishes,

dhm