5/12/17 was up +$0.99 and the model projects that the component on Friday's kill will move up between +1.15 and 1.45. With their higher bids packers were only able to purchase 72.4% of the moving average daily purchases of Index hogs. The six-day moving average carcass weight of index hogs has been declining a bit. I think packers have pulled index hogs forward a bit with their higher and higher bids. The kill for the last two weeks was below projections from the last H&P Report. The data is beginning to suggest that producers may not have had quite as many market hogs as indicated by the last H&P report.

The MMMs settled premium to the component by 6.57 on Friday. This morning they are trading premium to the component by 6.47. If packers have pulled hogs forward and there are fewer hogs than projected by the last H&P report, it is possible that the index will not only move up enough to close the "Gap" but could actually nudge the MMMs up a notch, by the time we get to cash settlement.

Looking at where we are now, there is a good chance that retailers have their cases loaded for the holiday. This could result in a bit less demand and packers might take a bit off the index in the near term. If they do, traders will likely let a little air out of the price of the MMMs. If they do, there could be some recovery when retailer begin loading up for Independence Day holiday.

The dynamics seem to be in place for some interesting day trading opportunities for both the MMMs and some of the calendar spreads.

Best wishes,

dhm