10/9/18 was down -0.27 and the model projects the component will change in the range of -0.05 to +0.25. Packers seem to have some more expensive hogs purchased that will mildly support the component for another day or so. The VVVs settled discount to the component by -0.60. We get four more days of data to get us to cash settlement. Yesterday I decided it was time to take profits on the long VVVs I had been riding and I probed the short side of the VVVs. Today I am not very comfortable being short the VVVs even though the Purchase Index now seems to be in a down trend.

With their higher bids, packers only purchased 86.3% of the moving average daily purchases of total hogs and 99.0% on the index hogs. Cutouts have eased a bit over the past week but not enough to force packers to be cutting their bids much. Packers have been running their hogs to market at a rapid clip. When that happens, it often for-tells weakness in the Index.

Still long the summer futures but have banked many and am waiting for a significant dip to reload my boat.

I agree, Dewey, this hog market is hard to read but I do not think there is going to be a major collapse in the summer futures.

Best wishes,

ddhm