5/11/16 was up +$0.36 and the model projects that the component will rise between +0.30 and +0.60. The up-trend is still intact. The MMMs are trading premium to the component by +7.04 and the KKKs are +1.09. With the component moving up about a half point a day perhaps the KKKs are priced just about right. The MMMs??

May be a little pricey.

Here is why I say that.

Last year my calculation for the average cost of carcasses was 80.12 and packers were selling the product for 83.07. This year the cutouts are at 83.40 so packers are selling the product for essentially the same as last year. My calculation for their average cost of carcasses this year is only 74.85 so it appears that packers have a little "Jingle" in their pockets to pump-up the Index if they can continue to move the product.

Sometimes the cutouts show a little weakness following the Memorial Day holiday surge. It could happen again this year or -

It could keep going up. Perhaps the direction will be dictated by the Chinese demand of which I know very little.

Now to see if I get a little relief for the boat load of K/M spreads I have hunkered down in port with. I do know that there will be a structural change tomorrow when the KKKs die.

Best wishes,

dhm