5/6/19 was down -0.26 and the model projects the component on Monday's kill will be down between -0.10 and -0.40. The MMMs settled premium to the component by +7.05. On average over the past 12-years, from this date until the MMMs go to cash settlement the index gained 5.47. In 2018 it gained 18.15 and in 2010 it lost -10.61. The index went up in seven of the twelve years and it was down in five. The average "UP" move was +11.60 and the average down move was -3.11. The last "Down" move was in 2011. The only thing these historical numbers tell us is that we might see a lot of movement in the CME Lean Hog Index between now and when the MMMs go to cash settlement. This year the magnitude and direction of that movement is going to be highly dependent on the amount of pork exported to China. And that is NOT a comfortable position to be in while trading the hog market.

The 6-day moving average carcass weight firmed to 215.79#. That is +1.17# yr/yr. Index hogs were unchanged at 214.10# and packer hogs are heavier than non-packer hogs by +3.51#. The high rate of kill of packer hogs lately may be telling us that packers are trying to get more current in their shipments. I do not view that as a bullish sign.

The limit move will be expanded to 4.50 today and that becomes a matter of concern since I am long the hog futures.

Best wishes,

Doc