9/16/15 was UP +$0.17. This is the second up day and may be an early indication that the post Labor Day slump is now ending and a rally of some sort is about to get underway. Packers still have a fair-size inventory of hogs purchased at lower prices. This causes the model to project that the change in the component on yesterday's kill will be in the range of -0.10 to +0.20.

On average over the past 19-years, from this date until the expiration of the VVVs the index has gained an average of +5.55. My data does not show a single year when the index has suffered a significant loss from this date until the VVVs expire. And that is over the entire 19-year history of the CME Lean Hog Index.

If this historical pattern holds again this year, with the VVVs trading discount to the index by 1.50, we can expect that "Gap" to be closed with the Index jumping. And it may jump enough to push the VVVs even higher.

Perhaps those traders who were buying the VVV 69 and 70 calls a few days ago knew what they were doing!!!

I was not among those buying them - - -nor was I selling them.

Best wishes,

dhm