12-30-14 was down -$0.02 and the model projects that the CME Lean Hog Index component on the kill for 12-30-14 will change between +0.05 and -0.25. It appears there is some weakness developing in the strong down trend we have been on. Perhaps the fall decline is about to give way to the spring rise. If there are a few more lighter weight hogs in producers' barns as the last H&P report suggests, the spring rise in the CME Index may not be quite as robust as we often see.

Traders are planning on a fairly strong up trend this spring. They have the GGGs priced premium to the index by 3.24, the JJJs by 5.34, the KKKs by 9.84 and the MMMs by 12.99. That seems like reasonable pricing except there is often a bulge in the KKKs in front of the Memorial Day weekend so the K/M spread of -3.15 may be a little too wide. Because the KKKs are so thinly traded, it takes a lot of patience to trade the K/M spread.

After licking my wounds over-night, I decided it was time to come out of my shell, ITZ, and probe the short side of the Feb cattle/hog spread. I'm now short at 84.25.

Best wishes,

dhm

B E H O L D T H E T U R T L E ! ! H E O N L Y M A K E S P R O G R E S S W H E N H E S T I C K S O U T H I S N E C K ! !