7/28/17 was down -0.48 to 87.89. The drop in the QQQs has opened the "Gap" to -7.54 with the QQQs at a discount to the component. The model projects that the component will need to drop an average of -0.72 per day for the next 11 data days to close that "Gap". On average over the past eight days the component has fallen an average of 0.54/per day. If this is the rate packers are going to be cutting their bids over tghe next eleven days, then the cash settlement will be 82.21.

Either packers are going to have to increase the rate they are cutting their bids or else the QQQs will need to rise a bit to close the "Gap".

This IS the time of the year when the price of hogs begins to fall. The VVVs are at discount of -21.84 to the component, The packers own about 1/3 of the hogs that will be coming to market and they know how much pork they have forward priced. Am I crazy or not to try to play ball with odds like that?

Still long some QQQs and short a smaller number of VVVs.

Best wishes,

dhm