5/30/17 was up a paltry +0.03 to 76.54. The "Gap" has now opened to +5.68 with the MMMs premium to the component. Generally we don't see the Index jump that much with only 11-days of data to come for cash settlement. But look at what is happening:

- The six-day moving average carcass weight has fallen to 210.37#.

- That is -2.01# year/year during a time when hogs should be growing rapidly with favorable weather.

- Packer hogs are now -0.99# under non-packer hogs suggesting packers have been emptying their barns to meet their kill needs.

- Yesterday packers only purchased 89.5% of the moving average daily purchase of Index hogs even though they pushed the Purchase Index up +0.42. Index hogs seem to be in short supply.

- There is a good chance that we will see an Independence Day demand surge before the MMMs go to cash settlement as retailer stock up their cases for grilling sales.

- The declining carcass weight suggests that 400K to 500K of hogs have been pulled forward.

Yup! We are contending with quite a "Gap" but we are not faced with a batch of bearish fundamentals either. I'm expecting the 3/31/17 inventory of market hogs to be revised downward.

Still long the MMMs and smiling.

Best wishes,

dhm

P.S.: I mostly don't deal in opinion, just hard data!