6/21/17 was up 1.22 to 89.89. The weakness in the NNNs has opened the "Gap" to -4.19. One-year ago the Index was at 84.61 and the NNNs were marching in lock-step at 84.475.
There is another year-on-year comparison - one-year ago the primal cuts were at 87.08 and the USDA reported them yesterday at 101.09. That represents a huge spike in demand especially when you consider that the amount of pork being produced this year is well above last year.

But -

Pork production is NOT nearly at the level we were expecting based on the last H&P Report. So far this week the kill is just 2.14% above the same period last year and the carcass weights are -2.32# yr/yr. Last week the kill was just 1.25% higher than the same week one-year ago. If demand holds and if hogs have been pulled forward as the numbers seems to be saying, packers may be willing to chase hogs for a few more weeks.

The 6-day moving average carcass weight dipped to 207.65# this morning. Index hogs also showed a touch of weakness at 208.02#. Packer hogs were 1/4# lighter but non-packer hogs weights remained steady. Packer hogs are now -2.35# under non-packer hogs. It continues to appear to me that packers are pulling their hogs forward at a rapid clip. I don't think they are doing so to liquidate their inventory of market hogs, rather I think they are needing to pull them forward to meet pork sales. The percentage of packer hogs in the kill mix continues to run above the "Usual" level and that is what would be expected as we see the carcass weights of packer+hogs fall.

I sold a N/Q spread this morning and now I am wishing I didn't.

Best wishes,

dhm