10/8/18 was DOWN -0.42 and the model projects the component on yesterday's kill will change in the range of +0.05 to *0.25. Packers may still have an inventory of more expensive hogs to kill that will support the component for a day or so however the up trend may be ending now. I have now sold all my long VVVs and am looking to get short to go to cash settlement. Have also taken profits on a good number of summer futures and will reload my boat on a significant pull back.
The VVVs are trading discount to the component by -0.84. With cutouts being weak yesterday and the Purchase Index having turned down, packers may close that "Gap" in a hurry with lower bids. I believe packers have been quite aggressive in shipping their hogs and that may be an indicator that they are expecting lower hog prices.
Best wishes,
dhm