6/15/17 was up 1.50 to 84.80. It has been a long time since we have seen a one-day surge like that. The NNNs are now trading discount to the component by -2.37. Obviously traders are thinking that there will be a post holiday slump in what packers will pay for hogs.

And they may be right. Sometimes the BLT season clicks in and gives some support to demand. The amount of bellies in freezers may be on the low side but high prices can dampen demand.

The six-day moving average carcass weight eased to 208.96# this morning. That is -1.95# year/year. Packer hogs were -1.34# under non-packer hogs. Index hogs were heavier at 209.01#. The weather may be warm enough now to slow finishing hogs. Historically there is a tendency for the Index to dip following Independence Day and following Labor Day it tends to go into a strong decline. Last year on this date the index was at 82.19 and the NNNs went to cash settlement at 79.90. The "Gap" we are now seeing of -2.37 may not be excessive -

But-

Packers seem to be on the prowl chasing down hogs so the "Gap" may be changed by a moving index that will nudge the NNNs higher. Dunno!

I have had to make several trips to the bank with money from calendar spreads that I was able to get off my boat. My goal is to keep an inventory of 50 to 60 calendar spreads working. I have been getting so many off lately that my boat is riding a bit high in the water with my inventory now down to 32. I have orders working to add 62 more but my pricing may be off because not many are being added.

Best wishes,

dhm