4/26/17 was down -$0.47 and the model projects that the component on yesterday's kill will dip between -0.25 and -0.55. We are still in a down-trend with the component shedding about a half a point a day. Packers made just a fair purchase yesterday at 85% of the moving average daily purchases.

The KKKs settled premium to the component by +5.20 and the MMMs were premium by 11.80. One year ago cutouts were 6.76 higher than they are now and the index was 8.90 higher than it is now. The direction the MMMs head is going to be driven by the same thing that always drives it, SUPPLY AND DEMAND. It is a guessing game as to where that takes us. My guess is that the supply of hogs will be sufficient to hold the index below where the MMMs are trading and probably below the KKKs.

At this point I am only spread with a few short KKK calls.

Best wishes,

dhm