6/5/18 jumped +1.03 to 73.01. Obviously traders were expecting this and had already pumped the MMMs up so they are now premium to the component by +5.19. The model calculates that the component will need to gain +0.81 per day for the next 7-days to close that "Gap". On average over the past 11-years we have not seen that much strength in the Index (eleven-year average +1.53) but in 2012 it gained +7.57 from this date until cash settlemen

The 6-day moving average carcass weight eased to 211.43#. That is only +1.02# yr/yr. Index hogs were lighter at 210.51#. Packer hogs were lighter by 1/2# but they are still heavier than the non-packer hogs by +2.63#. Less than a month ago they were four pounds heavier. Non-packer hogs were 1/4# lighter.

For the past 200-days packer hogs have made up 32.99% of the kill but for the past 6-days it has been 34.03%. Packers know the market better than the rest of us and they have geared up to this summer rally. Yesterday they were able to get quite a bit more for the cutouts.

SSSSSSSStill short the MMMs. It looks like it will be seven LOOOOONNGG days from now until cash settlement for the MMMs.

Best wishes,

dhm