10/25/19 kill was down -1.40 to 63.55. The ZZZs settled premium to the component by +2.10. The afternoon reports show that packers were bidding a bit higher in some markets today so the downtrend may be nearing an end. The afternoon Purchase Index was down -0.14 and the model projects the component on Monday's kill will be down between -0.20 and -0.50.

For a Monday, packers made a huge purchase: 134.8 % of the daily moving average daily purchases of total hogs and 118.8% on the index hogs.

The 6-day moving average carcass weight firmed to 214.09#. That is +2.14# year/year. Index hogs were also heavier at 215.27#. Hogs are growing rapidly now that weather has cooled and fresh corn is filling the feeders. In fact, the high kill rate seems to suggest that hogs are being pulled forward a little. If exports improve, this could be setting the stage for a rally in the CME Lean Hog Index in front of the ZZZs going to cash settlement. That seems to be what "The Market" is planning since the ZZZs are trading premium to the latest component. My thoughts are that the rally could be greater than the "Gap".

So-

I have loaded my boat with a few long ZZZs to go with the summer futures as well as many, many calendar spreads.

Best wishes,

Doc