12/5/14 was UP +$0.14 and the model projects that the change in the component on the 12/05/14 kill will be in the range of +0.10 to +0.40. Packers must have been hungry for a few more hogs to be bidding a bit higher for them.

And they got them.

The USDA reported that the number of hogs purchase Friday was 109.2% of the moving average daily purchases. The number of Index hogs purchased was also quite high.

Since 9/1/14 the kill has trailed my projection based on the last H&P report by about 305K. Additionally, it appears to me that the kill may have been ballooned up by as many as 400K by the liquidation of heavies as producers have become more current in their shipments. If this is the case, there may be a mild downward adjustment to the 9/1//14 inventory of market hogs.

It is possible that it also indicates that the number of hogs coming to market over the next few weeks will be mildly smaller than projected from the last H&P report. This may be the underlying factor causing packers to keep the Purchase Index firm on Friday.

This is the last week for the Z/G spread. I still have a few of them that I would like to cover. I will hold out for something around even. Usually the ZZZs do not expire premium to the GGGs but the supply of market ready hogs may be small enough to cause that to happen this year. We'll know by Friday.

Best wishes,

dhm