7/15/19 was up +0.20 and the model projects the component on Monday's kill will change in the range of +0.05 ant -0.25. Packers may have an inventory of cheaper hog purchased to cause a little weakness on yesterday's component. That component will make up the other 50% of the cash settlement index for the NNNs. The NNNs settled premium to the component by +0.08. It appears that cash settlement is going to be very close to where the NNNs settled.

Monday packers purchased 158.4% of the daily moving average of daily purchases. That is the largest one-day purchase of total hogs we have seen for a while and it happened on a Monday. Fridays are usually the big purchase days. For the index hogs the percentage was a more "Usual" 95.7%.

The Q/V spread came under pressure on Monday. The QQQs settled premium to the component by 9.40. The data may be suggesting that the kill rate is beginning to moderate a little and the cutouts posted a gain of 1.25 on Monday. It is going to take a combination of a lower kill rate and higher cutouts to keep the QQQs from drifting lower. Traders may conclude that exports will improve before the VVVs expire and that would push the Q/V spread lower just like the N/Q spread fell out of bed as it approached expiration.

Best wishes,

Doc