11/25/14 was down $0.22 and the model projects that the CME Lean Hog Index component on the 11/25/14 kill will change something like -0.05 to -0.35. Packers made a fairly weak purchase yesterday at 85.3% of the moving average daily purchases. That is understandable with a holiday this week.

The ZZZs are now trading premium to the component by 2.06. I continue to have this crazy idea that the kill rate will fail to rise to the level projected from the last H&P report. Steiner reports is his Daily Livestock Report that the kill is coming in about 1% below projections from the last H&P Report.

That is consistent with my numbers but our conclusions are a bit different. I think the liquidation of some heavies has contributed somewhat to the kill and when added to the short-fall. This may be enough to keep the kill rate a little subdued for the next few weeks.

Bottom line is that there may be good reason why traders have priced the ZZZs a couple of points above the component.

I think the hog market will be very quiet today and Friday so I may wander away from my trading desk some today.

I did scale out of a short Z/G spread this morning. That may be the end of my activity for today.

Best wishes,

dhm