kill for 7/22/14 was down -0.63 to 131.74. With the sell-off in the QQQs today, they are now 7.16 below the component with sixteen more trading days before we get to cash settlement.

In the last ten-years the Index has gained and average of 1.49 from this date until expiration. However in 2011 the index gained 10.85 and in 2009 the index lost 11.13. This tells us that this is the time of the year when there can be HUGE swings in the CME Lean Hog Index. With the Index at historically high levels, here is plenty of day-light below for Index to fall into IF there is a surge in the kill rate or IF demand were to collapse.

On the other hand, if the PED virus has wreaked havoc on the pig crop, we could see packers continue to chase hogs and the QQQs would be forced upward to close the gap. This market has me almost petrified to take a position but then I remember - "Behold the turtle, he only makes progress when he stick his neck out!"

Best wishes,

dhm