7/10/17 was up +0.21 to 92.71. Packers were really late getting their numbers to the USDA this morning. It looks like the NNNs have settled discount to the component by -0.51. Packers were really throwing money at hogs today when the noon reports came out. This unbelievable demand for pork must still be holding.

It appears that the QQQs are going to settle discount to the component by -10.36. That's huge for this time of the year. Oft times when there is a large "Gap" like that and the second month moves to front month there will be a limit move as the "Gap-closing-dance" begins. I might be crazy, but the dynamics seem to be right for that to happen to the QQQs when they become front month next week. It mostly depends on demand and that is more difficult for us to get our arms around than the supply side. We know there are more hogs than last year. Today the 6-day moving average carcass weight eased to 208.11#. That's -1.27# yr/yr so producers seem to be keeping current in their shipments. Index hogs came in at 208.44# and packer hogs continued to be lighter than non-packer hogs by -1.50#.

Packers killed a lot of their own hogs again yesterday. It is not clear to me whether packers are killing their own hogs because they want to market them before the price crashes or whether they are killing them because they are unable to find hogs otherwise. I'm tending to think it is because they cannot find hogs. The fact that they keep bidding higher and higher for hogs is the thing that tilts my thinking in that direction.

I'm still long the NNNs and that one lone QQQ pig.

Best wishes,

dhm