11/9/18 was down -0.83 to 61.53. It looks like the ZZZs are going to settle discount to the component by about -4.85. The model calculates that the component will need to drop by -0.24 per day from now until cash settlement to close that "Gap". The average drop over the past five days has been -0.51.

The six-day moving average carcass weight firmed to 213.3#. That is +0.55# yr/yr. Packer hogs are heavier than the non-packer hogs by +2.57#. It appears that packers have fallen being in their shipments but they may be catching up now. I say that because the the percentage of packer hogs in the kill mix for the past six-days has been 35.3% while the 200-day average has only been 34.2%. Index carcass weights are lower at 212.51# so index hog producers may be more current than others. Packers may have expanded production somewhat.

I am wondering if the increase in packer shipments may be suggesting that packers are expecting prices to weaken and they are wanting to get ahead of the curve with their shipments?I think if I had the inside scoop and it indicated prices were going to softening, I would be a bit aggressive in my shipments.

I took some profits on some summer futures and HODLed the ZZZs. The strength of the ZZZs early in the day sent me searching for a couple of Tums but things got better at the close. I have some empty space on my boat to add some summer futures if there is a dip. I wanted to buy the K/M spread down around the -9.00 level but it didn't go there.

Best wishes,

dhm

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