11/11/14 was UP +0.04 TO 88.01. The ZZZs are now premium to the Index component by 2.07. Obviously traders are thinking that packers are going to be needing to encourage producers to ship hogs a little faster by paying a bit more for hogs this fall.

Historically over the last ten-years the Index has gained 2.07 between now and cash settlement but the variance from year-to-year is huge. In 2009 the index gained 9.10 and in 2014 it dropped 2.79.

I think producer liquidation of heavies is behind a portion of the firm kill rate we have seen since 9-1-14 therefore I am inclined to think that packers may have to bid a bit higher to see who get to kill the hogs.

But I'm not a raging bull, just a bullish scalper.

Best wishes,

dhm