5/1/18 WAS up 0.35 to 62.84. The KKKs are now trading premium to the component by 4.34. The model calculates that it will take an average daily gain of 0.51 to close that "Gap". The component has gained an average of 0.756 per day for the past 11-days. I don't think that rate of gain will continue. Packers need to sell the product for more in order to have the money to bid higher and they are just not getting it. So I am still short the KKKs.

The 6-day moving average carcass weight eased to 214.33#. That is +1.55# yr/yr. Index hogs were lighter at 213.36#. Packer hogs continue to be heavier than non-packer hogs by 3.44#. The percentage of packer hogs for the past 200-days has been 32.94% and for the past 6-days it has been 35.0%. With packer hogs being heavier and more of them, it appears that packers are expanding their production capability to a significant degree.

Yesterday I picked up two-points plus commissions on the short June cattle/hog spread. I have met my budget for the year now so I might wait until next year to try another trade. This last one just about scared the bee-jeepers out of me before it gave me my profit target.

Best wishes,

dhm