10/11/19 was up +0.47. I took a vacation last weekend and the data on my Hog Pricing Model became a bit garbled so the model is not projecting a change in the CME Lean Hog Index for the 10/11/19 kill. It looks to me like it should be something like a +0.60. The component on the 10/10/19 kill was 61.28. That means the VVVs settled premium to the component by +1.69 and there are only two-days of data to get us to cash settlement. Later this morning we will get the component on the 10/11/19 kill and it will be 50% of the cash settlement index. If it comes in at a +0.60 as the afternoon Purchase Index seems to be suggesting, then the component on today's kill will need to jump a whooping +2.08 to close the "Gap". The cutouts on Friday were up +0.61 but that hardly seems to be enough to drive packers to bid higher by +2.08 even though their gross margins on INdex hogs are quite favorable at +$34.25/Index hog.

Maybe the morning reports later today will give us a better idea what we can expect relative to the cash settlement index for the VVVs. At the point the data seems to suggest that being short the VVVs going into cash settlement is a low-risk trade.

Best wishes,

Doc