in the CME Lean Hog Index troughed out on 4/2/15 when it hit 59.58. Since then it has gained 5.48 for an average daily gain of 0.42. If it continues to gain that amount until the MMMs go to cash settlement, the index will tack on 14.74. With the "Gap" at 12.55, the index seems to be on track to close the "Gap" and push the MMMs up a couple of points.

Will the Index tack on that much?

Well, the traders voted yesterday and their conclusion was, "Yes it will!"

Since 3/1/15 the kill has been +10.39% higher than last year. That appears to be about 1.5% higher than suggested by the H&P report. Producers seem to be keeping their shipments very current so they may be a mild amount of market hog liquidation included in the kill. The past few days the number of hogs packers reported purchased was a bit weak. Yesterday's scheduled number was only 3.85% higher than the same date last year and the Model is projecting that the Purchase Index for yesterday will be up $0.44.

It is difficult to know what these data points mean but it is surely possible that they are pointing to tighter hog supplies in the very near future. Generally the Index will bounce a little in front of the Memorial Day holiday and it is just around the corner.

Like Blind Hog says, "You pays your money and takes yur chances!"

Yesterday I took my chances with a couple of short MMMs and it turned out to be wrong. I bought some more K/M spreads and they turned out right. Sometimes you win and sometimes you lose.

Best wishes,

dhm