11/14/14 was UP +$0.02 which for all practical purposes is unchanged. The model projects that the component on Friday's kill will also be essentially unchanged - - - perhaps in the range of -0.15 to +0.15.

According to the USDA numbers, packers made a very solid purchase Friday at 121.6% of the moving average daily purchases. On Friday packers already had quite a large number of hogs scheduled so I am anticipating the the scheduled number today will also be large.

In looking at the numbers, I see that the 6-day moving average carcass weight has fallen from a +8.43# year-over-year to a current +2.03# year-over-year. My thoughts are that in order to drop the carcass weights that much, producers have had to liquidate a bunch of heavy hogs and this liquidation process has brought extra hogs to market - perhaps as many as 400K. Even with this liquidation of heavies, the kill since 9-1-14 is running 211K below projections from the last H&P report.

I am now becoming concerned that the USDA overstated the number of market hogs in the last H&P report by perhaps 300K to 600K. If that is the case, there could be some more short-fall in the kill rate between now and when the ZZZs go to cash settlement.

This morning I have all of my hog trades spread and am more inclined to buy a dip rather than sell a rally.

Best wishes,

dhm