5/9/17 was up $1.63 and the model projects that the component on yesterday's kill will move up by something like +1.20 to 1.50. That means to close the "Gap" for the next few days the component will need to tack on +0.82 to get the job done. I think it will happen and maybe even nudge the KKKs up a bit and here is why:

- Packers seem to be short bought for the Memorial Day trade and are scrambling to find hogs.

- Cutouts surged yesterday suggesting that retailers are in a hurry to get their cases filled for the holiday and the holiday demand should still be showing some life by the time the KKKs go to cash settlement.

- Even with their very strong bids yesterday, packers were only able to round up 68.1% of the moving average daily purchase of Index hogs suggesting the supply of Index hogs is very tight.

- Packers have been killing a higher-than-usual percentage of packer owned hogs and this underscores the fact that they cannot find Index hogs. Perhaps packers have anticipated this and have been finishing their hogs to heavier weights to get more pork.

Best wishes,

dhm

Now the MMMs are a different story. Demand may peter-out a bit following the Holiday at least that is what the historical data shows. If the index dips leading up to the holiday, there is a good chance that the MMMs will to. This could be followed by a recovery when packers begin gearing up for the Independence Day demand surge.

I have orders working to buy the K/M spread at