7/9/15 was up +$0.57 and the model projects the CME Lean Hog Index component on the 7/9/15 kill will be up between +0.35 and +0.65. After this morning, there will be four data points to get us our cash settlement number for the NNNs. The model is now projecting that the cash settlement index for the NNNs will be 80.05 with a range of 79.60 to 80.60.

Generally when we get this close to expiration, the packers and other big boys with a better knowledge of hog numbers will move the index close to where cash settlement will be. This month there is more disharmony than usual and so I worry about the projected cash settlement that the model is projecting. Last night the NNNs settled discount to the component by -0.29.

The kill this week is coming in at +4.37% over the same week last year. From the H&P report, something like + 11% to + 13% would be expected. I suppose it is possible that the USDA over counted and the high kill numbers seen in June actually represented some liquidation of market hogs by producers.

At any rate, I decided to trade the model's projected cash settlement index for NNNs and go long into cash settlement. When the dust settled last night I was net long twelve NNNs. Never! NEVER! have I loaded my boat like that so the strength in the NNNs is really welcome news this morning.

Ka! Ching!! Just took some NNN money to the bank. There are a bunch more still on deck and I'm anxious to off-load a few more but I want to see them creep a bit closer to 80.00.

Best wishes,

dhm