4/27/18 was up +0.42 to 62.41 which was very much in line with what the model projected. The KKKs settled premium to the component by 3.89. The model shows that the component will need to rise +0.37 per day from now until expiry to close that "Gap". Over the past 9-days it has gained an average of +0.88 per day. Yesterday the purchase index was down and this may indicate that the up-trend is a risk of reversing or at least slowing. The kill rate continues to come in equally as strong as projected by the last H&P Report.

The 6-day moving average carcass weight yesterday as steady at 215.12#. That is +1.49# yr/yr. Packer hogs continue to be heavier by +3.53#. Over the past 200-days the percentage of packer hogs has been 32.89% but over the past week it has moved up to 34.7%. Either packers have fallen behind in their shipments or they have decided to expand and produce a larger percentage of the market hogs. I think it represents continued vertical expansion by packers and pushing the family operations out of business. I'm not sue that is good for the country.

The Purchase Index was down yesterday. That may represent a trend reversal so I added a couple of short kKKs with the idea of taking them to cash settlement. The KKKs are not very liquid so they are hard to trade but they do go to cash settlement just fine and if the up-trend has ended or at least slowed, the liquidity doesn't matter.

Best wishes,

dhm