11/20/14 was down -$0.21. The model projects that the change in the CME Lean Hog Index component on the 11-20-14 kill will be in the range of +0.15 and -0.15. The packers have a nice inventory of hogs purchased at various price and it is a bit difficult to project what the mix will be that they opted to kill yesterday, but the model has made its best estimate. Usually it does a fairly good job of giving us a "Heads Up!" prior to the CME publishes the actual number.

It appears to me that there is a fairly high probability that the kill this fall and winter will not rise to the level implied by the last H&P report. If that turns out to be the case, the CME Index may rise a bit. It may not be enough to close the 1.88 "Gap" we have now but if the ZZZs settle back to close the gap to 1.00, I will buy a ZZZ and take the risk. Usually demand is fairly good this time of the year but an abundant supply often over-powers the demand strength.

That may not be the case this year.

For today I'm expecting the ZZZs to show a little strength as traders square up for the weekend. At least that is the way it has happened lately. I don't understand why that happens because there is a short for every long but for some reason it seems to be the shorts that take cover.

I just scaled out of a short LEG5/HEG5 spread at 80.275 and am now ready to scale back in with a sell at 80.875 or will scale out of another one if it dips to 80.175. I expect one or the other order will be hit today.

Best wishes,

dhm