4/21/14 kill was down -0.46 to 132.37. That puts the HEQ4 at a discount of 6.94 to the component. The model's projection once again had the range right.

On average for the last ten years, from this date until for the QQQs go to cash settlement, the Index tacks on 1.84 but it exhibits a lot of volatility as the supply/demand factors vary from year-to-year. In 2011 the index gained 11.55 and in 2009 it lost -10.84. My bias is to believe the short supply will keep the index firm but producers may have fallen out of currency in their shipments and this could pressure the index if producers decide to run a few extra heavy hogs to market.

There is a good chance that when we get to cash settlement the index will be fairly close to the cash settlement index at which the NNNs were settled but getting there could be a mighty bumpy ride.

Best wishes,

dhm