9/13/19 dropped a whooping -1.75 to 57.77. The VVVs settled premium to the component by 5.86. It appears to me that the announcement by the Chinese that tariffs will be scaled back for a while has really riled the hog futures market. Packers are killing record high numbers of hogs and the pork is piling up forcing primal cuts down. Packers are still bidding lower and lower for hogs. Until the announcement translates into higher exports, the surge in futures may be on shaky ground. The uncertainty this has created is causing the calendar spreads to jump around like crazy keeping me mighty busy getting them on and off my boat. I have flipped more calendar spreads today and Friday than I have flipped for a long time.

The 6-day moving average carcass weights firmed to 211.64#. That is +2.30# yr/yr. Index hogs were also heavier at 210.92#. Packer hogs were lighter than non-packer hogs by -0.55#.

By cutting their bids and getting a small bump in cutouts, the model calculates that packers were able to get their gross margins on Index hogs up to $23.14/hog this morning.

The data is not yet suggesting that the CME Lean Hog Index has has posted the seasonality low. After we get the "Low" we can begin what may be a long chase for the next Hog Cycle crest. I am HODLing a handful of QQQs thinking the crest might show up next summer. We know the Index can move above 130 because it has done that before. The Chinese hog losses are an event that could cause it to be repeated.

Best wishes,

Doc