7/18/14 was down $0.69 and the model projects that the component on the 7/18/14 kill will be down between -0.20 an -0.50. The CME Index component on Thursday's kill was premium to the QQQs by 6.33 at Friday's settle. With 18 trading days before the QQQs expire, there is plenty of time for the gap to close with a move from either the Index or the QQQs.

On Friday packers made only a fair purchase at 78.3% of the moving average daily purchases. Friday's purchases are usually fairly large. Maybe producers were a little reluctant to sell at lower bids.

But it could be that packers didn't want hogs so they bid lower. Cutouts seemed to hold up well so I'm suspecting it was slow selling on the part of producers that kept the purchases low.

The six-day moving average carcass weight is holding up well so I'm suspecting that the low kill rate for the last few weeks may be the result of producers dragging their feet just a little in shipping hogs. If that is the case, the kill rate may hold up well for the next week to ten days or more. The weather has been cooler than usual so this has been a factor in keeping carcass weights firm.

On average over the past ten-years from this date to the expiration of the QQQs the CME Index gained 2.09. The maximum gain during that time interval was 11.97 in 2011. In 2009 the Index fell by -10.30. This tells us that during this time of the year the index can make some dramatic moves.

I'm long a few QQQs but they may get dumped this morning if there is some more weakness in the QQQs.

Best wishes,

dhm

With beef in short supply and trading at record high prices, I'm suspecting that pork demand will hold quite well. The bigger quetion mark in my mind is where will supply be?

I'm suspecting that the USDA numbers on the last H&P report may have been fairly good and the low kill for the past few weeks represents producers holding back about 288K of hogs since 6/1/14.is still