5/17/19 was down -0.39 to 84.40. That was a bigger dip than projected. The MMMs are now trading premium to the component by +6.55. Packer hogs made up more than 50% of the kill mix on Friday/Saturday. The vertical integration by the packers seems to be progressing.

The 6-day moving average carcass weights eased to 215.01#. That is +1.41# yr/yr. Index hogs were steady at 213.32#. Packers continue to finish their hogs to heavier weights but not as heavy as they were - now by just +2.58# heavier than the non-packer hogs.

The price of the MMMs is holding better than I thought it might. It is going to take strong exports to keep that +6.55 "Gap" from becoming a burden on the price of the MMMs as we move toward cash settlement. The futures market is projecting the seasonality high will be touched in August before the QQQs go to cash settlement. If market forces are allowed to work, I doubt that will be the "High" for the next Hog Cycle. My thoughts are that will be hit summer 2020 and the futures market does not have it priced in.

Best wishes,

Doc