7/12/18 was down 0.31 to 80.75. The NNNs are now trading discount to the component by -0.80. The model calculates that the component will need to drop -0.53 per day to close the "Gap" For the last 6-days it has dropped -0.21 per day. It now appears that I might be able to pick "Benjamin" or so by going to cash settlement long the NNNs. So I have now covered the short and have gone long the NNNs to go to cash-settlement. If there is a dip, I will buy more.

The six-day moving average carcass weight was up a little at 208.95#. That is -0.13# yr/yr. It appears that producers and packers are trying to quickly get hogs to market. This will reduce the amount of pork produced. Index hogs were a bit heavier at 208.33# . Packer hogs were -1.12# under the non-packer hogs.

The percentage of hogs killed over the past 200-days was 33.90% packer hogs. Over the last 6-days it has been 34.89% packer hogs. Packers are continuing to ship hogs quite aggressively. One-year ago the percentage of packer hogs on a 200-day moving average basis was 33.20% . It does appear that packers have expanded their production a bit.

Today I was able to take profits on three short Q/V spreads. Generally I prefer to trade the Q/V spreads from the long side but the recent spike above 17.00 was too high to resist although historically the spread was far above 20 in 2014.

Best wishes,

dhm.