8/22/14 was down $1.07 and the model projects that the CME Index component on the 8/22/14 kill will give up between -1.30 and -1.60.

The HEV4s settled at a discount of 11.10 to the component Friday. Last year on this date the discount was 11.58 and by the time we went to cash settlement the HEV3s gained +5.52.

Whether or not we see the HEV4s gain to close the gap may depend on whether or not producers are current in their shipments (which would indicate the USDA projected to many hogs) or whether the kill since 6/1/14 is accurately projecting that producers have a bunch of heavy hogs that are about to come to market.

I think there is a good chance that the down trend in the CME Index will continue for a couple more weeks so I have a couple of short VVVs. It wwwwwwoooon't take much profit to send me to the bank!

Best wishes,

dhm