6/5/17 was up +0.32 to 78.39. The MMMs are now trading premium to the component by 3.78 and the model projects that the component will need to tack on an average of 0.57 per day to close that "Gap". Today I got the one to two point move up in the MMMs that I was expecting so I cashed in a couple of the long MMMs and sold an 82 June call to cushion the down move on another if there is a down move. Not much change and I keep the premium.

The 6-day moving average carcass weight eased to 210.67#. That is -2.42# year/year. Producers seem to have pulled hogs forward to meet packers appetite for hogs and it is especially packer hogs that are being pulled forward. Packer hogs are now -0.65# under non-packer hogs. The six-day moving average of packer hogs dropped 3/4# yesterday. I think that is quite a drop. Index hogs were also lighter at 210.82#. If there is a surge in demand for the holiday, packers may have to bid for hogs because they seem to have pulled a lot of hogs out of their barns already.

Supply and demand drive the price of goods and services. I continue to believe that the hog market is unique amongst all of the markets because the supply/demand data is far superior to that available in any other market. This spring my Hog Pricing Model has done a credible job of keeping me on he correct side of the front month futures. I hope my posts have helped some of you get on the right side of the front month futures with me and enjoy the ride.

Best wishes,

dhm