2/27/19 was down, again, this time by =0.16 and the model projects that the component on yesterday's kill will be down between -0.20 and -0.50. Yesterday packers threw me a surprise and killed expensive hogs the gave the component a boost up. That may mean that they have more cheaper hogs purchased than anticipated and the leg down on yesterday's kill will be larger than projected. Any way I look at it, the data is saying another leg down on yesterday's kill. With cutouts being weak yesterday, it is doubtful that packers will be bidding higher today.

Packers purchased 85.8% of the moving average of daily purchases of total hogs yesterday and 99.4% on the index hogs. Producers seem to be willing sellers as the price erodes away and packers continue to ship larger percentages of the kill than they did last year. The hogs packers are shipping are heavier than the hogs produced by the non-packers. This may not mean that packers are bullish on hogs but it does mean they are taking more and more control over the production of pork.

I am still long the deferred contracts but it may not be wrong today.

Best wishes,

dhm