5/23/18 was up 0.16 to 69.36. The MMMs are trading premium to the component by +5.21. The model calculates that the component will need to rise by 0.36 per day to close the "Gap". The Index is trending up but the trajectory does not seem to be quite that strong. The three-day moving average is +0.253 so I am going to stick with the being short the MMMs. Actually I added more this morning.

The 6-day moving average carcass weight eased to 212.91#. That is +2.42# yr/yr. Packer hogs are +2.43# heavier than the non-packer hogs. Both packer and non-packer hogs were a bit lighter today. It appears that the supply of market ready hogs is tightening a little and this is causing lighter weight hogs to be shipped. The fact remains that the total pork being produced is up and demand for the extra pork just doesn't seem to be there. If Packers can't sell the stuff at a profit they are not going to be bidding higher for hogs.

Packers are continuing to provide a larger percentage of the hogs processed. Over the past 200-days packer hogs have been 32.99% and during the last 6-days it has been 34.61%.
As long as packers have an ample supply of their own hogs to bring in, their bids may be just mostly steady or even down a bit if cutouts don't bounce. There was no good news in the cold storage report with frozen pork up 5% for the month and 9% year/year.

On average over the past 11-years from this date until cash settlement the Index gained 0.27. The most it gained during that eleven-year stretch was +9.07 in 2013. In 2010 it actually lost -7.78. It has been up five of the eleven-years and down six.

Best wishes,

dhm