In my historical studies of the Q/V spread I notice that there is a powerful tendency for it to put in a low about the time that the GGGs expire and I am wondering why?

Is it because retailers are pricing pork for the holidays and they do so by buying VVVs and that drives them up relative to the QQQ?

Or is it because they entering contracts with the packers to buy pork at a set price for the holidays and packers hedge their hogs by buying VVVs??

Or is it that producers want to hedge their August production and this drops the price of the QQQs relative to the VVV??

Something surely seems to go on year-after-year and now we are seeing it again this year with the spread heading for a life of contract low of 8.40. If the pattern holds, we will then see a slow rally start that will last until the KKKs take over as front month.

Best wishes,

dhm