5/14/18 was up +0.39 and the model"projects that the component on yesterday's kill will be up between +0.25 and +0.55. This means that those who chose to go to cash settlement short the KKKs will be paid and those who chose to go to cash settlement long will be the "Payors". Once again the model kept me on the correct side of the expiring contract and this time I was able to get on the correct side much earlier and stay consistently short for a significantly longer period of time. Now it is telling me to get short the MMMs which I did yesterday.

Packers made a solid purchase of total hogs yesterday at 106.4% of the moving average daily purchases. Not so well on the Index hogs at 92.7%. If packers are expanding their production, it might be the producers of Index hogs that are pulling back on their production. I suppose if packers vertically integrate to a significant degree the lean hog futures could go the way of the egg futures market and the potato futures market and the frozen bellies futures market. I for one would hate to see that happen.

Best wishes,

dhm