10/12/18 was unchanged at 68.75 so the cash settlement index will be 68.75 and that is exactly where the VVVs settled on Friday. Once again I had good results as I relied on the Model as a tool to guide me through to cash settlement. The ZZZs are now trading discount to the component by -11.88. "The Market" is planning on the index taking a significant drop over the near term. It looks like the up-trend in the Index is coming to an end.

The six-day moving average carcass weight firmed to 211.02. That is +0.11# year over year. Cool weather and fresh corn may be beginning to finish hogs more quickly. With carcasses being heavier now than last year suggests that producers may be finishing hogs a bit faster than they are shipping them right now. Packer hogs are only 0.56# heavier than the non-packer hogs and the percentage of packer hogs in the kill mix is now dropping. It may be that packers have now liquidated quite a few of their market hogs. My thoughts were that packers were hurrying their hogs to market in front of the fall decline in prices. At this point it is beginning to look like that is exactly what has happened.

The percentage of packer hogs in the kill mix over the past 200-days has been 34.02. Over the last 6-days it has been 33.96%. For a while the short-term kill showed packer hogs were a couple of percent higher than the total kill now they are running below it. Packers apparently moved out a bunch of their hogs over the past couple of weeks.

Sold a QQQ pig but my target on the other summer months did not get hit.

Best wishes,

dhm