6/2/17 was up +0.43 to 78.08. That was a bit stronger than projected. The MMMs are now trading premium to the component by +3.50. The model projects that the component will need to move up 0.45 to close that "Gap" . With a holiday coming up with an expected demand surge, my bias is that the "Gap" will be closed plus a little so I am long the MMMs.

Packers are bidding a little higher today and by 9:30 they had purchased a lot of Index hogs with their higher bids.

The six-day moving average carcass weight moved up to 211.17# this morning. That is -2.18# year/year. Even though the six=day weight was up, it appears that producers are keeping very current in their shipments. Actually, I think hogs have been pulled forward a bit. It is especially the packer hogs that have been pulled forward. PAcker hogs are now -0.63# lighter than non-packer hogs. Not long ago they were nearly four pounds heavier. That represents quite a bit of liquidation of market hogs by packers.

I'm still long the MMMs and bought a few calendar spreads this morning and have been able to take profits on M/N spread and am getting close on a Q/V spread.

Best wishes,

dhm