10/31/19 dropped -1.12 to 61.54. The ZZZs are trading premium to the component by +2.41. Yes, indeed, Dewey, the downtrend is still intact and gained momentum yesterday. The model calculates that packers' gross margins on Index hogs rose to $31.06/index hog. I believe packers can survive just fine on margins like that.

The 6-day moving average carcass weight moved up to 214.12#. That is +2.01# year/year. Index hogs also came in a bit heavier at 213.51#. Packer hogs are running -0.69# lighter than the non-packer hogs suggesting that packers may be running their hogs to market a bit faster than the non-packers. Sometimes when packers get bearish, they hurry their hogs to market in front of the non-packers. I am wondering if that is happening now?? For a while the kill rate was running ahead of the projected kill from the last H&P REport. I am wanting to get the final kill for this week to see if this trend is continuing. This IS the season when hogs grow well with cooler weather and fresh corn so it is possible that a portion of the high kill rate is mild numbers of hogs being pulled forward. The percentage of packer hogs in the kill mix has now move back above the 40% level. Yup! Packers are moving their hogs to market at a brick clip.

The seasonality low of 54.67 set on 9/24/19 is still holding. That is an early post for the seasonality low. It usually occurs near the time the ZZZs go to cash settlement but I think the shortage of world pork may have the seasonality pattern for this year somewhat distorted and we now have the seasonality low. Next stop, then, will be the seasonality high which usually occurs around July 1st. If the pattern hold, we have plenty of time for the hog market to exhibit lots of volatility in the way to the seasonality high!

Best wishes.

Doc