The CME Lean Hog Index component on the kill for -

5/4/17 was only up 0.07 to 63.32. The KKKs are now trading premium to the component by 3.11. The model calculates that the component will need to gain 0.57 per day from now until cash settlement to close that "Gap". That does not seem to be the trajectory we are on so I am staying short the KKKs thinkig of going to cash settlement with then.

The 6-day moving average carcass weight eased to 214.36#. That is +1.89# year/year. Packer hogs were a bit heavier and non-packer hogs dropped a bit. Packer hogs are not +4.33# heavier than the non-packer hogs. Index hogs were a bit lighter at 213.23#. Over the past 200-days packer hogs have made up 32.96% of the kill mix. In the past 6-days that kill has been comprised of 35.2% packer hogs. Either packer have significantly expanded their production or else the high packer kill percentage represent some liquidation of
packers' inventory of market ready hogs. The heavy weight of packer hogs suggests to me that packers are significantly expanding their production of hogs. The low prices this spring will probably drive more small, independent producers out of business and the void will be filled by larger corporate production.

Best wishes,