was down -0.38 to 56.65. It appears that the ZZZs will settle premium to the component by about +1.38. My bias continues to be that the down trend in the CME Lean Hog index will continue long enough to pull the ZZZs down a bit so I will hang onto a few shorts and sell rallies and cover when they dip. It worked a little today. But being long the summer futures did NOT!! Nor did the summer futures dip enough to tempt me to buy more.

The six-day moving average carcass weight firmed to 213.37#. That is -0.84# year/year. Index hogs were also a bit heavier but are lighter than the total hogs at 212.18#. Packers are continuing to ship their hogs heavier than non-packer hogs by +2.83#. The data continues to show that packers have expanded production a fair amount. One year ago packers were shipping less than 33% of the kill. Now they are shipping about 35% of the daily kill. That represents expansion of the production capability of the packers. My view is that packers will continue to expand their production capability because the quarterly reports from the USDA seem to suggest that larger operations get more pigs per litter and that represents greater efficiency. The small family farrow to finish operations may be doomed.

Likewise hog futures may go the way of egg futures, potato futures and pork bellies. But I hope not - at least for a few more years!

Best wishes,

Doc