9/23/19 was down -0.41 to 54.57 setting a new seasonality low for the CME Lean Hog Index. It is doubtful that this is THE low because the afternoon Purchase Index was -0.70 and the model projects the component on the kill for 9/24/19 will drop between -0.30 and -0.60. When we are in a strong trend, the Purchase Index will often turn a day or two before the CME Lean Hog INdex turns.

The VVVS settled premium to the component by +7.43. TRaders are really expecting packers to begin bidding very, very aggressively for hogs.

And they may; after all their gross margin today were +$31.94/Index hog. The problem is that we are getting very near the end of the trail for the VVVs and if they get spooked, it is conceivable we could get a limit move down as the "Gap" closing waltz gets underway.

The kill this week is coming in very weak at -0.75% below the same period last year. If it represents a shortage of hogs, packers may begin a bidding frenzy to see who gets to kill the hogs. On the other hand, if it represents a slowing down of the chain speeds by the packers so they don't have so much product to move, it could be a very big problem.

The six-day moving average carcass weight eased to 211.05#. That is +2.31# yr/yr. Index hogs were also a bit lighter at 211.34#. The weights are not suggesting hogs are backing up.

Because of the down trend in the indices and the wide "Gap" I am staying cautiously short the VVVs.

Best wishes,

Doc