12/15/14 was down 0.69 to 86.21. That extends the down trend to four days. With the Purchase Index being on a down trend, I think we will undoubtedly see another down day for the CME Index component tomorrow.

I didn't post it yesterday, but the cash settlement price for the ZZZs was 87.30. That helps a little on the short legs of the Z/G spreads that I carried into cash settlement. I rolled all but one of the long GGGs that were left into short Feb cattle/hog spreads and they treated me well.

The six-day moving average carcass weight eased to 215.65#. That is +2.55# yr/yr. Both packer hogs and non-packer hogs were lighter but packer hogs dipped more. Yesterday I was wondering if producers were falling a little behind in their shipments. The answer now seems to be, "No! They are staying quite current and their inventory of market ready hogs is not burdensome."

I have mentioned before that historically there is a mild tendency for the Index to rally a little between now and the first of the year. I may be grasping for straws, but the declining carcass weight may be a clue that supplies are low enough to keep packers from cutting their bids too far.

Best wishes,

dhm