8/8/18 was down -1.75. That is the largest one-day drop we have seen during this down-draft. The model projects that the component on yesterday's kill will fall between -1.35 and -1.65. Packers may have enough hogs purchased that were more expensive to limit the decline a little but make no mistake about it, we are in a serious down-trend. The QQQs settled discount to the component by -7.98. Traders are thinking this downtrend may last through the end of the year.

Producers were willing sellers enabling packers to purchase 100.7% of the moving average daily purchases of total hogs and 100.7% on the index hogs.

Usually at about this point I start accumulating front month futures to take a few to cash settlement. NOT THIS TIME!!

But I am accumulating some long summer month futures. I now have enough that I am selling rallies and buying dips as we search for the "Trough" for this hog cycle. I believe I will trade the post "Trough" recovery better than I traded the "Search-for-the Trough".

Best wishes,

dhm