7/10/18 was down -0.13 to 81.46. The NNNs are now trading discount to the component by -1.61. Cutouts suffered a significant hair-cut yesterday so packer may continue to lower their bids enough to close that "Gap". I don't want to be long the NNNs and be depending on the packers to bid higher to bail me out! I think I will short the NNNs on a pop higher as a scalping trade.
The six-day moving average carcass weight firmed to 207.85# this morning. That is -0.39# yr/yr. Index hogs were lighter at 207.97#. Packer hogs were a bit heavier than the non-packer hogs by +0.23#. Packers have really been running their hogs to market and have now become as current in their shipments as the non-packer producers.

Packer hogs made up 33.91% of the kill over the past 200-day but 35.24% over the last six-days. I will be watching to see if this percentage stays high. If it does, it will suggest that packers have expanded their production.

Expanded production seems to have outstripped demand under the current geopolitical environment. I'm watching to see who blinks first as we move into the "Liquidation Phase" of the Hog Cycle.

Best wishes,

dhm