8/9/19 was down -0.61 to 81.48. The QQQs are now trading discount to the component by -2.18. The model calculates that it will take an average daily down move in the component of -0.90 to close that "Gap' Since this down trend started, there has not been a one-day drop large. With packers' margins on the rise, (18.16/hog this morning), it seems doubtful to me that packers will be lowering their bids that much so when the QQQ backed off a little this morning, I piled another one on my boat.

Over the past 6-days the component has dropped an average of -0.56 per day, If we stay on that same trajectory for the next three days, the QQQs will go to cash settlement at 80.09.

The 6-day moving average carcass weight eased to 208.33#. That is -0.54# yr/yr. Producers seem to be quite current in their shipments. Packer hogs are -1.36# lighter than the non-packer hogs. Ondex hogs were steady at 208.47#. Packers have been running their hogs to market at a brisk clip. On Friday packer hogs made up 42.7% of the kill on a six-day moving average basis. That is a high-water mark. If the jump of +1.75 in cutouts we saw on Friday is a sign of things to come, packers may not going to have an owned supply of hogs they can turn to to fill out their kill need but will have to compete with each other to see who gets to kill the Index hogs.

Perhaps I should have piled ten more QQQs onto my boat instead of a measly one. If the dip goes a bit deeper, maybe I will.

Best wishes,

Doc