9/10/19 was down -0.43 and the model projects the component on Tuesday's kill will drop between -0.65 and -0.95. The VVVs settled premium to the component by +0.45. Hog prices are still i a strong downtrend. Cutouts were essentially unchanged at +0.08. The model calculates that packers gross margins on Index hogs were $20.46 today. That is a nice improvement over the red ink packers were running a few weeks back

.Packers keep bidding lower and lower and hogs keep showing up in fairly strong numbers and the carcass weights are heavier than one-year ago. Packers are producing a lot of pork and they are having to keep lowing their prices to move all of it. The hog futures continue to be extremely volatile.

I continue to have this feeling that there is an imbalance between supply and demand and the large supply will push the index down a bit by the time the VVVs go to cash settlement so I sold another VVVs when they put in a strong rally just before the close. The afternoon Purchase Index seems to validate this feeling.

Best wishes,

Doc