8-14-15 was down -$0.09 and the model projects that the CME Lean Hog Index component on the 8-14-15 kill will change in the range of +0.15 to down -0.15. This will be the other 50% of the cash settlement index for the QQQs. We already have the 50% from the 8/13/15 of 78.66. The model is now projecting that the cash settelement index for the QQQs will be between 78.58 and 78.73. It looks like selling a boat load of QQQs at 79.05 will not be a huge burden on my margin.

But what about the VVVs?

The kill is still coming in firm at +10.02% over the same week last year. From the H&P report I was expecting something like +8.7%. The six-day moving average carcass weight is -4.02# yr/yr. But the big shocker is the fact that the cutouts 5-day moving average price is down 26.03 for a decline of 26.03 for a 22.4% drop. This makes me think that much of an increase in demand will move the VVVs upward a little. The "Gap" -12.93 with the VVVs under seems to be a little much.

But you never know. I find trading the VVVs to be one of the most difficult months although selling the V/Z spreads has treated me well so far this fall. I'm flat them currently but have order working to sell again if we get a little bounce.

Best wishes,

dhm