10-12-15 was up +$0.07 and the model projects that the CME Lean Hog Index component on the 10/12/15 kill will be up between +0.10 and +0.40. The up-trend is continuing fulfilling the strong historical trend of showing strength as we move toward the VVVs going to cash settlement. With the VVVs being discounted to the component by -0.40, it just might be that there will be another half to full point added to the VVVs by the time we get to cash settlement making it worthwhile to stay long the VVVs and go to cash settlement.

I have been buying some V6/Z6 spreads below 2.50. Historically over the past 13-years the average spread at cash settlement has been 3.99. During that thirteen year period the lowest the spread got was -6.15 0n 10/13/2003. The low point for the V5/Z5 spread was on 6/29/15 when it dipped to 1.60. As with any futures trade, there is risk but the risk of being long the V6/Z6 spread seems to be reasonable and the reward can be decent in the event it bounce to 7.50 like the V/5/Z5 has done.

Best wishes,

dhm