5/9/16 was +0.51 to 75.41. As usually happens, the model was right on in its projection of the change in the Index component. The KKKs are now trading premium to the component by 1.32 and the MMMs are premium by 5.27. Looking at the up-trend taking place in these indexes, I think there is a good chance that the index will move up and close the KKK's "Gap". I think there is a fairly high probability that the MMMs will shed a few tics and maybe even points to close their "Gap".

Because of this, I am looking forward with more than casual interest to the expiration of the KKKs when I will be left with a bunch of short MMMs. I think they may just make the EAGLE "Squawk" for me.

The six-day moving average carcass weight declined to 213.85# with packer hogs being lighter, non-packer hogs were lighter and Index hogs were also lighter. In terms of numbers, the Index hogs declined to 212.17# and continued to be the lightest weight category.

The 6-day moving average carcass weight is +0.81#year/year. With the large number of hogs being killed and the heavy weight, we are producing a lot of pork meat this spring. So far packers are able to move it quite well. The story may change a little when we get by the surge brought on by the Memorial Day holiday.

Today four spread trades left my boat and three were added on for a net decline in inventory of one. That is what I'm looking for - a steady stream of spreads coming and going. It is getting to be interesting to keep track of which trades are coming and going at at what price.

Best wishes,

dhm