5/15/17 was up 1.33 to 73.74. The MMMs are trading premium to the component by 5.06.

The six-day moving average carcass weight dipped to 211.12#f That is -2.01# year over year. Both packer and non-packer hogs were lighter in weight. It surely does appear that hogs are being pulled forward by the higher bid prices. Index hogs are lighter at 210.96#. Packer hogs are only +1.19# heavier than non-packer hogs. It appears that packers have been liquidating their inventory of market hogs to meet the holiday demand surge. Perhaps we are now seeing why packers have been finishing their hogs to heavier weights. The number coming in continue to suggest there is a possibility that the inventory of market hogs was somewhat less than indicated on the last H&P report.

And the cut out report yesterday pointed to continued firm demand. Not bearish!

But that is what traders have concluded and thewy have built a premium into the pricing of the MMMs. The question is, "Is the premium too big, too small or about right?"

My bias is that demand will be strong enough to to push the MMMs up a point or two by the time we get to cash settlement. I'm not quite sure how to trade it since there is often a dip in the Index following the meeting of the holiday demand. I'm getting some help today from some long M/N calendar spread.

Best wishes,

dhm