8/27/18 was DOWN -1.28 and the model projects the component on yesterday's kill will plummet between -0.80 and -1.10. The search goes on for the "Trough" for this Hog Cycle. It appears that someone forgot to tell the packers that they are supposed to be bidding higher now that we have a deal with Mexico.

With their lower bids, packers only purchased 89.4% of the moving average daily purchases of total hogs and index hogs were way down at 72.9%. I don't know if packers were just not wanting hogs or whether producers balked at the lower bids packers were throwing out.

The limit move yesterday opened the "Gap" to +7.57 with the VVVs premium to the component. When the 201 report comes out, the "Gap" widens. I suppose it is possible that the futures market is getting ahead of itself with its bullish euphoria over the trade deal. But I won't try trade it but will be content to HODL the summer futures. If they are strong again today, I may cash one in and try to replace it on a dip.

Best wishes,

dhm