12/1/14 was down -$0.15 and the model projects that the change in the CME Lean Hog Index component on the 12-1-14 kill will be in the range of -0.10 to +0.20. That is essentially unchanged.

The ZZZs are premium to the component by 1.13. I'm suspecting the the Index will move up to close the "Gap". Historically there has been a strong tendency for the Index to move up a point or more between the end of November and the expiration of the ZZZs. With the kill being a little weak and the carcass weight near the year-ago levels, it appears to me that packers may keep their bids firm until the retailers get their cases full for the holiday rush.

The Z/G spread is trickling back toward even-money. On the rally yesterday I sold. Covered this morning at +0.425 and am now working orders to scale back short again. I don't know how many of you have been trading the Z/G spread with me, but it has been a very good trade to scale in "Sells" on rallies and cover on dips. Historically the ZZZs seldom expire premium to the GGGs. My doubts are that it will not happen this either.

This morning I scaled into another short Feb Cattle/Hog spread @ 82.025. Had orders working to scale into to more shorts but the market ran out of gas before reaching my other two sell orders. My fingers are itching to sell a June cattle/hog spread in the 65.00 range but my head tells me it could also reach the low 80s.

Best wishes,

dhm