The bull spreads in the lean hogs have turned sharply lower and topped out over the last 24 hours. Currently the June/December spread has moved by nearly 200 points before the pit opening bell has rang. We had been commenting that the bull spreads were severely overdone. The latest CME lean hog index stands at 100.34 with Oct futures still above 10500 early today. My outlook is for Oct to pullback toward 100 with Dec futures pulling back all the way to 9000 eventually. Cash hog prices were flat yesterday. Today's action in futures seems to indicate the surge upward in the cash hog market has run its course for now. The sharp break in the product has attracted demand with seasonal demand driving hams upward. This week the loins have gained traction as well. Look for additional gains in the pork cutout despite the downward move in futures.

I sold some more april yesterday, and still have all my other shorts. The infamous pig report is due out again in a couple of weeks! Reports have a way of messing up the applecart sometimes! This will be an important report I think.
Dewey