6/17/16 was up +0.43 and the model projects that the component will jump between 0.35 and 0.70.

With these higher bids, packers were only able to round-up 90.9% of their moving average daily purchases. There is a good chance that the hog numbers are there. It's just that they didn't move that well Friday. The kill last week was up 1.31% from the same week last year. From the last H&P report, I was expecting it to be up something like +0.78%. The kill was on the slightly high side.

Cutouts for the week were up 1.38 so demand was all right, however we have to keep in mind that Independence Day is coming up and there is a demand surge there. It just might be that part of the strength in cut outs was retailers filling their cases in front of the holiday.

The NNNs are trading premium to the component by 3.37. The four-day moving average component jump has been 0.476. If it continues on that track, it will add 4.53 by the time the NNNs go to cash settlement. On that basis, then, it is possible that the NNNs are a bit under-priced but there could be some weakness in demand following the holiday making a continued gain of 0.476 questionable.

This Friday we get the quarterly hogs and pigs report and that will tell us something about the USDA's view of hog numbers. Lately their reports seem to have been fairly accurate with modest after-the-fact changes.

Today would be a good day for the N/Q spreads to show a little strength which they have not done lately.

Best wishes,

dhm