5/4/15 was up +1.81 to 73.96. That was up way-more than the model projected. Over the last four days the component has jumped an average of 1.59/day. That closes a lot of "Gap". And there is still a lot of "Gap" to close - - - 4.46 on the KKKs in seven trading days and 8.94 for the MMMs. It looks like I should have been buying KKKs this morning instead of MMMs. I suppose you have to take what comes and love it!

This I know - - - I am plenty happy to see the K/M spread in the threes instead of the eights. I now have enough cargo space on my boat to add a few K/M spreads if they dip again. My preference is that they keep moving up so that I can get flat that spread in the next seven trading days.

The six-day moving average carcass weight dropped to 213.35#. That is nearly a half-pound drop in one-day! It is now -3.87# compared to this date one-year ago.

Something is going on here that doesn't seem right. Not only did the 6-day moving average carcass weight drop, but the number of hogs scheduled is relatively low being a paltry +0.12% over the same day one-year ago. From the H&P report I was expecting about +8.0%. This is beginning to smack of a "Hole" in producers' supply of market ready hogs. I had been watching thinking there was the possibility that producers were liquidating their inventory of market hogs and the declining carcass weight seemed to be confirming some liquidation.

It is going to be interesting to see how packers manage the Memorial Day demand surge. The last couple of days seems to be saying that they will manage it by putting more cash on hogs.

Best wishes,

dhm.