11/19/19 was down -1.19 to 58.96. The ZZZs are now trading premium to the component by +2.27. The Index is getting low enough to cause me to wonder if the Index low of 54.67 set on 9/24/19 is going to be the seasonality low. After all it is only -4.31 below where we are now and the way packers are taking the Index down, there is a chance that a new seasonality low will be posted. Yesterday cutouts tumbled -4.47. That is about the biggest one-day drop I have ever seen. The weakness in the cutouts has dropped packers' gross margins to $53.41/Index hog. That is still a fine margin for packers.

The 6-day moving average carcass weight eased to 215.09#. That is +2.17# yr/yr. Index hogs were also a bit lighter at 214.97#. Packer hogs are now +0.05# heavier than the non-packer hogs. These numbers suggest that producers are keeping quite current in their shipments. The last H&P Report pegged the hogs that should be coming to market now at +5.32% greater than the same period last year. The kill lately has been somewhat lower than that. With carcass weights being down a bit, there is a chance that there may be a few less hogs in the pipeline than the H&P Report projected.

The rough weather today shook loose quite a few of the outright long futures I had piled onto my boat and the pit sharks swarming around gladly gobbled them up. My boat was not swamped but it is listing to starboard and I am limping back to port to repair some of the damage that was done. The sharks are still swarming around and more of the long out-rights may end up getting dumped into the water for them to clean up.

I did get a few trips to the bank with some calendar spreads but not enough to off-set the damage done by the long futures.

Best wishes,

Doc