CME Lean Hog Index component on yesterday's kill will be late. From the morning reports the model projects the component will be down between -0.30 and -0.60. If the component is down -0.60 and the same amount again tomorrow, that will just about close the "Gap". In the un-likely event the GGGs move up to 56.075, I will sell a couple more to take to cash settlement.

With their lower bids yesterday, packers were able to purchase 84.7% of the moving average daily purchases of total hogs and 94.8% on the Index hogs. Producers seem to be rather willing sellers of hogs. The kill so far this week is running 8.2% higher than the same period last year. I keep looking at the higher-than-expected kill rate and the declining carcass weights and I wonder, "Are hogs being pulled forward?"

If they are being pulled forward, it may set the stage for a rather rapid rally in the CME Lean Hog Index once the kill rate begins to decline as it almost always does as we move toward the Independence Day holiday. We may get a clue about the up coming kill rate when the 50# to 119# category of hogs begin coming to market near the end of the month.

I am thinking about buying another April option ratio spread. I am looking at buying the 58 put at 1.275 and selling two 56 puts at 0.90 for a credit of $$220.00

Best wishes,

Doc