5/6/16 was up +0.35 to 74.90. The fact that it was somewhat less than projected by the model may mean that the pre-Memorial Day holiday surge is now running out of steam.

There does not seem to be a shortage of hogs. Earlier this morning I mentioned the high kill last week and this morning the 6-day moving average carcass weight came in firm at 214.40#. That is +0.94# year over year. Not only are packers killing quite large numbers but they are heavy hogs. The percentage of the kill that is packer hogs seems to be rising a little. Index hogs were mildly lighter at 212.84# but they were heavier also. Packer hogs added the most weight of any category and they are now +3.18# over non-packer hogs.

Perhaps Smithfield is producing a lot of pork and exporting it to China or planning to export it to China. At any rate, a lot of pork is being produced and so far the MMM bulls are keeping them pumped up plenty high although the "Gap" is now closing. With the drop in the price of the MMMs and the move up in the component, the "Gap" is now closed to +5.27 with the MMM premium to the component.

I continue to feel there is some room for the MMMs to fall more. We often see a limit move to close "Gaps" as large as we now see in the MMM-to-index spread. Perhaps this dribbling lower by the MMMs is going to take away the prospects of a limit move. A persistent decline of three or four days can equal a limit move.

The KKKs are only premium to the component by +1.10. It is possible that will close by the Index moving up so the K/M spread of 4.10 may close a little. If it does, I have some K/M spreads that will move off my boat in a hurry.

Ka!! Ching!! Just made a trip to the bank where I made a deposit from a profitable closing of a short Z/G spread. That thing has been hanging around my neck like a mill stone for months. Sometime spreads do that to a body.

Best wishes,

dhm