7/10/18 was down -0.25 and the model projects that the component on yesterday's kill will drop between -0.20 and -0.50. With their lower bids packers purchased 113.5% of the moving average daily purchases of total hogs and 122.1% on the index hogs. Packers now seem to be as current in their shipments as the rest of the producers.

The hog production environment seems to be setting up for a "Liquidation Phase" for this hog cycle with the trade war being the "Straw that broke the camel's back". Packers know better than the rest of us so I will be watching to see if the percentage of packer hogs in the kill mix remains high and the weight of packer hogs continues to decline. If that happens, it would be suggestive that packers are on the leading edge of the "Liquidation Phase".

I'm glad to hear, ITZ, that you have a nice core of your producers well hedged for this fall's shipments. It is uncertain how long the tail will be to this phase but the market is saying it will last far into the new year.. And I am not prepared to argue with "The Market".

Best wishes,

dhm