7/29/14 was down -$1.06 and the model projects that the CME Index component on the 7/29/14 kill will drop between -0.70 and -1.00.

The HEQ4 futures are trading at a discount of 7.17 to the CME Index. The market dynamics are right for continued high volatility as traders wrestle with the problem of trying to discern whether the kill rate will drop or not in the near term. It appears to me that producers are a bit behind in their shipments and now have a few heavy hogs to liquidate. The cutouts seem to be holding up well. Beef being in short supply may be moving consumers to more pork.

For sometime I have been expecting a bumpy ride in getting to cash settlement with the QQQs. And the market is not disappointing me. I continue to like buying dips and selling rallies. I missed a good buy on the early morning dip today.

Best wishes,

dhm