"It's not written in stone that Aug has to hold a $14 premium over Oct. A $10 premium is more than sufficient."

But -

The hog market does not respect "sufficiencies" and the Q/V spread has settled above the $14 premium in each of the last four years. To be sure, I never anticipated that the Q/V spread would reach $14 but I knew it might. When the spread dipped to 6.40 in April I was busy scaling into positions and ended up with my boat a little over-loaded. I dumped most of them in time to re-load about a month ago when it once again dipped to 7.125. Thinking $10 was sufficient, I started dumping thinking it would probably dip to $8 again.

Wrong!

Now I have been bobbling along like a cork with an empty boat as they move on up near $15 with $18 being a possible target.

The point?

"In the hog market you can always expect the unexpected", correctly observed by our departed fellow trader Long Bear.

Best wishes,

dhm