4/23/15 was UP +$0.49 and the model projects that the CME Lean Hog Index component on the 4/23/15 kill will advance between +0.40 and +0.70. The spring advance in the Index is still intact.

The number of hogs coming to market so far this week is 13.25% higher than the same week last year but they are 2.98# lighter. I think this may mean the producers are very current in their shipments - - - in fact there may have been some liquidation of their inventory of market hogs. I say that because the number of hogs scheduled for deliver the past three days has been significantly lower than it was the last year.

And the number of hogs purchased yesterday was fairly modest at 90.6% of the moving average daily purchases.

Cutouts made a nice tic higher yesterday. It is not clear to me where the demand came from. The cold storage report showed quite a bit of pork in freezers so it would appear that demand will need to surface from someplace to clear the pork. The obvious place to look for that increase in demand is China. With the number of people in China, if each one were to eat an extra pork chop, it would take a big bite out of our excess product.

Generally there is a steady up-swing in the CME Index from now until mid-May as retailers gear up for the Memorial Day trade. I keep thinking this may close the K/M spread a little but it surely isn't happening yet. And it may not happen. It didn't in 2012 or 2014. Maybe traders are clinging to the idea that the Chinese demand will not materialize until after the KKKs for to cash settlement.

And so the uncertainty continues. My bias continues to be that the MMM's premium to the Index is excessive and may dribble back down by a couple of points some place along the way as we await cash settlement.

Best wishes,

dhm