8/14/19 was down -0.08 and the model projects the component on Wednesday's kill will drop between -0.30 and -0.60. The component for the 8/1/19 kill was 79.51. That will be 50% of the cash settlement index for the QQQs. The model calculates that it takes a drop of -0.22 to close the "Gap". Any larger drop in the component will drop a few coppers into my account for each short QQQ pig I rode into cash settlement. Not a very big deal, just a testing of the effectiveness of the model.

When the afternoon reports came out, packers had purchased 100.2% of the daily moving average daily purchases of total hogs and 98.4% on the index hogs. Producers seem to be willing sellers and they seem to be quite current in their shipments. I say that because the 6-day moving average carcass weight is slightly below that of the same date last year.

Packers have really been able to remedy their poor margin problem. The model calculates that it has now moved up to $19.50 per hog. Packers can probably survive on that but of course they want more.

I have sold some Oct options. Tomorrow I may need to make some adjustments to my options portfolio. I have a short 69 call hanging out there that is feeling a bit of pressure from the surging VVVs. I may need to defend a little.

Best wishes,

Doc