7/31/19 was, as projected, up and by +0.66 to 84.45. That is on the high end of what the model was projecting, but still nicely in the range. The market had my attention this morning as yesterday's sell-off continued. Watching my margin get ravaged was not easy but I had decided that I would HODL if the going got rough which it did. The QQQs are now trading discount to the component by -5.85. At 84.45, the component is on the verge of posting a seasonality high. The current high is 84.59 posted on 5/17/19. If packers have an inventory of enough more expensive hogs to kill today, tomorrow we could set a new seasonality high.

It very much depends on demand.

If packers are able to sell the product well today, there is a good chance they will bid hogs up enough to give us the seasonality high. But that says nothing about where the cash settlement index will be for the QQQ. We will need to keep biting our nails on that one.

The 6-day moving average carcass weight was essentially unchanged at 208.60# That is only +0.65# yr/yr. Producers seem to be staying very current in their shipments and packers have probably reduced their inventory of hogs. Packer hogs are +0.61# heavier than non-packer hogs.

This morning I was able to scalp a couple of QQQ20s as well as getting several long Q/V2020 calendar spreads on and off my boat. But this down trend is hard on the margin.

Best wishes,

Doc