1/30/15 was down -0.80 to 69.99. That puts the GGGs at a discount of 2.89 to the component. This seemingly indicates that traders are expecting the CME Lean Hog Index to continue to decay away over the next ten days as we move toward cash settlement.

The MMMs are premium to the Index by 13.9 indicating that traders are expecting the Index to make a major climb. If there has been as much expansion as the kill rate seems to suggest, the index may climb something like ten or eleven by the time the MMMs go to cash settlement. If that is the way it turns out, the MMMs will go to cash settlement three of four points below where they are now trading.

The numbers continue to suggest that we are in the expansion phase of the "Hog Cycle".

Best wishes,

dhm