9/2/25 was down -$0.98 and the model projects that the CME Lean Hog Index component on the 9/2/15 kill will fall between -0.40 and -0.70. As we move beyond the Labor Day demand surge, it appears that the down trend in the index is beginning to pick up a little steam. Historically there tends to be a fairly good sized drop in the index after the Labor Day Holiday. It just might be that we will see that pattern play out again this year.

That does not necessarily mean that the VVVs and the ZZZs will suffer much of a decline. Traders have already discounted the VVVs to the component by seven buck and that may be just about the amount that the index will drift lower or it might be that the index won't give up that much and the VVVs will actually end up tacking on another tic or two by the time we get to cash settlement. This uncertainty makes life interesting in the fast track.

I was able to take profits on a long V/Z spread this morning. The spread is now high enough that it is tempting me to short it.

Best wishes,

dhm