5/23/17 was up 0.27 to 76.21. The MMMs are now trading premium to the component by +4.59. That is quite a "Gap" but I remind myself that the index gained about a dozen pointss when retailers were filling heir cases for the Memorial day trade. If the supply of hogs tightens in June as it often does, I suppose we could get a repeat of that bounce.

The six-day moving average carcass weight was steady at 216.48#. That is -1.82# year over year. The data just keeps hinting that hogs are being pulled forward to meet the strong demand that is coming in from someplace. Growing weather is good so that does not explain the slump in the carcass weights. Index hogs were also steady at 21.64#. Packer hogs are now below non-packer hogs by -0.81#. Packers have really raided their barns for hogs and I think it is to keep the kill rate up. The other possibility is that they are wanting to market their hogs before the price crashes. That seems like the less likely scenario to me.

The model projects that it will take an average jump in the component of +0.32/day to close the "Gap". That is quite a tall order and I am not willing to bet against it. Still long the MMMs. This morning I took profits on a long Q/V calendar spread. I am wishing I had it back even though I have quite a few more on my boat.

Best wishes,

dhm