7/13/15 was up +$0.39 and the model projects that the CME Lean Hog Index component on the 7/13/15 kill will be up between +0.30 and +0.60. The model is now projecting that the cash settlement index for the NNNs will be 80.67 with a range of 80.17 to 81.17. I am a little reluctant to post these numbers because I realize that packers can and do jump the index around big time on some occasions. I look at the environment we are currently in, though, and I see no reason for packers to want to drop the price much right now.

Cutouts are holding fairly well. The number of hogs they purchased yesterday was 95.5% of the moving average daily purchases and the six-day moving average carcass weight has been declining a little so producers are probably quite current in their shipments. The NNNs are trading discount to the component by -0.28 and with the prospects that the component is going to move up when we get the 201 report, it looks like being long the NNNs is the way for me to be.

And I am. Never have I had a stronger directional position than I carried over last night and the market is rewarding me for it this morning. I hope some of the rest of you joined me in getting long the NNNs last week when they made a fairly strong, unjustified dip.

Best wishes,

dhm