6/1/18 was way, WAY U P by +1.23 to 71.58! We all understand that this is the season when hog prices show some strength. So the debate is not whether or not hog prices will go up, rather how much will they go up between now and when the MMMs go to cash settlement. The MMMs are now trading premium to the component by +5.32. The model now calculates that it will take an average daily gain of 0.62 to close that "Gap".

I don't think that will happen so I'm short the MMMs. Since the MMMs became front month the component has gained an average of +0.46 per day.

The 6-day moving average carcass weight moved up to 212.43#. That is +1.25# year/year. Packer hogs are heavier than non-packer hogs by +3.71#. Index hogs are lighter at 211.24#. Producers of index hogs are quite current in their shipments.

Over the past 200-days packer hogs have made up 33.00% of the kill. For the last 6-days the percentage stands at 33.88%. It appears that packers have moved quite a few of there market ready hogs to market and may be more current in their shipments now and the weight differential is merely a reflection of packers wanting to process heavier hogs..

When the M/N spread showed some strength this morning, I was able to get a very large number of the longs off my boat for which I am grateful. Some had been on there far too long and were at risk of getting moldy.

Best wishes,

dhm