8/13/18 was down -1.87 to 55.75. The component has dropped an average of -1.59/day for the past 6-days. That is serious contraction for the producers to deal with and it is the producers of negotiated hogs that are being hit especially hard! Some will most likely be forced to exit the business. It had NOT been my intention to take any QQQs to cash settlement -

But -

When the Purchase Index plummeted this morning and the QQQs did not follow suit, I could not help myself. I just had to get short. And so I busied myself piling short QQQs on my boat. When the 201 report came out, it validated the projection from my hog pricing model and the QQQs hit the skids. The model shows that the component will need to drop -1.50 to close the "Gap". The component has dropped an average of -1.76/day for the last four-days. The model continues to be a handy trading tool when we get close to cash settlement.

THE six-day moving average carcass weight eased to 208.42#. That is +1.28# year/year. Index hogs were also a bit lighter at 208.30#. Packers have done a great job getting current in their shipments. Their hogs are now -0.34# lighter than the non-packer hogs.

I was getting a nice portfolio of summer futures and decided to take some profits with the idea of replacing them on the next dip. There has been no "Next-dip" yet so I am HODLing the remaining summer futures. There is a good chance that another dip is coming in the summer futures.

Best wishes,

dhm

!

ha