8/23/18 was down -1.12 and the model projects that component on yesterday's kill will dip between -0.80 and -1.10. This means that another low for the CME Lean Hog Index for this Hog Cycle will be posted this morning when the 201 report is released. With the VVVs trading premium to the component by +1.45, "The Market" is saying that the cycle low will be hit before 10/12/18 when the VVVs go to cash settlement.

The last H&P report suggested that the amount of pork to be produced may continue to be strong after the VVVs go to cash settlement so it is the demand side that we will need to rely on to keep the "Trough" from arriving somewhat after the VVVs expire. Cutouts fell more than a buck yesterday so packers are going to need a market they didn't have yesterday to carry off all the pork. There are enough Chinese to do that if they end up with a pork production problem.

The summer futures are showing no signs of weakness today so I will probably not add any to my boat today.

Best wishes,

dhm