6/23/17 was up 0.35 to 90.80. The NNNs are now trading discount to the component by 4.07. It looks to me like the "Gap Closing Dance" has now begun and "The Market" has turned a less bearish. The component was not up as much as the model projected. This may be suggesting that the up-trend in the Index is now slowing. When the racte begins to slow, it is often a sign that there is an impending change in direction which in this case would be for the index to dip. That would fit the historical pattern of some weakness following the passage of the holiday surge in demand brought about by the up-coming holiday.

It seems almost a given that the Index is going to fall. The question is, "By how much?"

My feeling has been that the "Gap" was quite a bit too wide. I still think it is too wide even though the NNNs have jumped two points this morning. Perhaps the NNNs will tack on another point by the time the we get to cash settlement. The ride to cash settlement may be a bit bumpy, though.

The six-day moving average carcass weight fell to 207.46# this morning. That is -2.14# yr/yr. Packer hogs were especially lighter dropping about 1/3#. Packer hogs are now -2.66# under non-packer hogs. This continues to suggest to me that packers have not been able to purchase the number of hogs they have needed so they have chosen to liquidate their inventory of market hogs a little. The number of packer hogs in the slaughter mix on Friday was once again high at 33.38%.

I'm still long the NNNs but not nearly as long as I was but my wallet is thicker.

Best wishes,

dhm