7/9/14 was stronger than projected from yesterday's afternoon reports. It actually came in at +$1.01. This moved the projected change in the CME Index component on the kill for 7/9/14 up to +0.70 to +1.00. If the NNNs remain at their current level, we will see the gap between the NNNs and the index evaporate when the 201 report comes out in an hour or so. It wouldn't surprise me to see traders bump the NNNs up a little when they see that the index component on yesterday's kill is holding firm.

The number of index hogs purchased yesterday was a little on the weak side. Producers are either a little short of market ready hogs or else they are reluctant sellers in the face of higher packer bids.

The closer we get to expiry, the better my model performs as a trading tool. At this point the model seems to be pointing "UP" for the index so I will most likely go to cash settlement long some NNNs, unless of course traders drive them somewhat higher than where they are currently trading.

Best wishes,

dhm