7/24/18 was down -0.80 to 74.85. The QQQs are now trading discount to the component by 8.87. That is quite a "Gap" but packers can close a lot of "Gap" when they take nearly a buck a day off their bids. And that is what they have been doing lately.

The 6-day moving average carcass weight dipped to 206.91 today. That is +0.12# yr/yr.. Index hogs were a bit heavier at 207.44#. Packer hogs were lighter than non-packer hogs by -1.61#. Packers are continuing to run their hogs to market faster than the non-packers. I think that tells us something about what is going to happen in the future and it is NOT good news for producers!

Have you heard it said, "Can't see the forest for the trees"?

Well, I now realize that I have been looking at trees. I have been so focused on what the front month is going to do and playing with my hog pricing model that I forgot to really look at the forest - that is the hog cycle. I have now cleaned my glasses, taken a few steps back and slapped my face to see if I can wake-up and see the forest.

It seems logical that if we are in the chase to find the "Trough" for this Hog Cycle, then down the road the hog market will begin to climb. Producers always expect current prices will continue indefinitely into the future. There is a fair-sized probability that this mentality has caused "The Market" to drive next summer's futures too low. Additionally the seasonal cycle virtually always moves the price of hogs up in June, July and August. I'm not wildly bullish the MMMs, NNNs and QQQs but I will get there if they drop into the low 60s. I piled a couple more onto my boat today.

Best wishes,

dhm