9/18/19 was down -0.26 to 56.20 giving us a new seasonality low but it is highly doubtful that it is THE low. I say that because the afternoon purchase index was once again projecting that the component on Thursday's kill will shed another -0.30 to -0.60. Cutouts did a bit better yesterday gaining +0.91. That gain, along with the dip experienced by the component, bumped the packers' gross margins on index hogs up to $27.06/hog. That is getting to be up near where the packers can survive but it has come at the expense of the producers. Until more demand surfaces, packers are not likely to become very generous in their bidding for hogs.

The six-day moving average carcass weight firmed to 211.00#. That is +1.96# yr/yr. Index hogs were also heavier at 210.92#. Not only are the hogs coming to market heavy, but there are lots of them. The kill this week is running +14.23% above the same period last year. Packer hogs are coming to market -1.27# lighter than the non-packer hogs. Cool weather and fresh corn is just around the corner, then hogs begin to finish faster. "The Market" says we will hit the low for this seasonality before the VVVs go to cash settlement.

There is a shortage of worldwide pork on the horizon but not in the USA and so far too much of our pork is staying home. I am trading this by being short the VVVs and long the QQQs and flipping calendar spreads on and off my boat as fast as I can. Lately that has been at a mighty high velocity. The VVVs are still premium to the component by 5.20. That seems to me to be a bit strong with the component still trending lower.

BEst wishes,

Doc