5/19/17 was up 0.11 to 75.94. The MMMs are now trading premium to the component by +3.56. The model projects that the component will need to move up and average of 0.21 per day from now until cash setttlemet to close that "Gap" . In view of the fact that there will most likely be a holiday demand surge in front of cash settlement, the is not a lot of "Gap" to close. The problem is that the index may dip now that the Memorial Day demand surge is met and this could lead to a dip in the index over the next few weeks and the MMMs could follow it lower only to recover before cash settlement. I will stay long the MMMs and hope the draw down is not too severe.

The 6-day moving average carcass weight was firm at 216.77 # this morning. That is -2.37# year/year. Packer hogs are now -0.66# lighter than non-packer hogs. Packers have been very aggressive shippers of hogs the past few weeks. I think it is because they were having trouble finding the hogs they needed. But I may be wrong. They may have been shipping in front of a price slump.

Friday packers made a strong purchase of Index hogs at 107.8% of the moving average daily purchases and they did it with a mildly lower bid as represented by a decline in the Purchase Index.

Best wishes,

dhm