12-16-14 was down -$0.98. The model projects that the CME Lean Hog Index on the 12/16/14 kill will drop between -0.60 and -0.90. Considering the way the primal cuts dropped yesterday, I guess the packers feel they have no choice other than lowering their bid prices.

Producers were not falling all over each other to sell hogs yesterday at these lower prices. Packers only purchased 89.2% of the moving average daily purchases. I don't know whether packers did not want more hogs so they cut their bids or whether producers balked at selling hogs at the lower price. My guess is with the holidays coming up, packers were not wanting to load-up on too many hogs.

I think it sometimes gets tricky for producers to get hook space during the holiday season.

The limit down move in the GGGs this morning has discounted them to the Index by 7.43. I'm suspecting the limit move in the cattle may have caused the hogs to make a knee-jerk reaction that is a bit much. If that is right, sometime this week the GGGs may recover a little.

I was able to spread my lone GGG future with a short MMM cattle at the opening. This should keep me from being blistered too badly.

Best wishes,

dhm