5/28/19 was down -0.40 and the model projects the component on 5/28/19 kill will drop between -0.25 and -0.55. Both the Purchase Index and the CME Lean Hog Index are now trending lower. The MMMs settled premium to the component by +0.66 so the "Gap" is nearly closed and the closing has come about by the MMMs making a rather sharp decline. Not only have the MMMs declined but the Index has also dropped and the drop has been sufficient to have me watching the Index high of 84.69 set on 5/17/19 to see if it is going to be the seasonality high for this year.

"The Market" is saying, "Nah! The seasonality high will be set about the time the QQQs go to cash settlement and it will be up near the 90 level."

Even though packers were bidding lower, they were able to purchase 98.8% of the moving average daily purchases of Index hogs and 99.5% on the Index hogs by the time the afternoon reports were released. Producers seem to be quite willing sellers. The direction the MMMs go will be highly dependent on what the Index does and at this point in time it appears the Index may continue to work a bit lower.

Best wishes,

Doc