The CME Lean Hog Index component on the kill for -

5/8/18 was up 0.38 to 63.73. The KKKs are now trading premium to the component by +2.15. The model shows that it will take an average daily component gain of +0.61 to close that "Gap". Packers don't seem to be that anxious to buy hogs so I am still short the KKKs. The MMMs are trading premium to the component by +12.85. Quite obviously traders are thinking packers will be near desperate for hogs to meet the Independence Day grill. To be sure, there will be a BIG grill that day but beef and chicken are competing options. In my mind it is going to be a stretch for the component to close the "Gap" to the MMMs but I'm not short the MMMs - - - yet but watching very carefully for when they become front month.

The six-day moving average carcass weight was steady at 214.08#. That is +2.28# yr/yr. Packer hogs are heavier than non-packer hogs by 3.93#. Both packer hogs and non-packer hogs were a bit heavier yesterday. Index hogs were a bit lighter at 212.59#. Producers of Index hogs seem to be more current in their shipments than the packers.

The percentage of packer hogs in the 200-day moving average has been 32.97%. For the past six-days the percentage of packer hogs has been 34.71%. This really smacks of packers having expanded their production and I'm suspecting more family operations will exit hog production when this hog cycle comes to an end.

I have been able to work the June cattle/hog spread fairly well this time around. RIght now I am flat but looking to sell again when the set-up looks favorable.

Best wishes,