8/27/18 was down merely -0.30 to 46.91. Never-the-less this posted a new low for this Hog Cycle and I think we are poised to post another new low tomorrow. The futures market is saying that the low for this Hog Cycle will be posted before the VVVs go to cash settlement. It is betting that pork will start to flowing into Mexico at an increased rate now that we have a new trade agreement. The VVVs settled today premium to the component by +5.09. Cutouts were a little weak today and bellies took quite a thumping being down -4.33. It appears that packers are ramping up the kill rate.

I say that because the 6-day moving average carcass weight dipped to 207.98#. That is -0.27# yr/yr. Index hogs were also lighter at 208.49#. Packers are continuing to ship their hogs at a brisk clip. Packer hogs are -0.93 # lighter than the non-packer hogs.

When some weakness developed in the VVVs I sold three and have now covered one. I am NOT HODLing these. I will cover them on the least bit of strength in the morning. I am still HODLing the summer futures. It was not much fun HODLing them today but I did buy a MMM on the dip and sold it on the rally so that will cushion the draw down a little.

Best wishes,

dhm