2/4/15 was down -0.88 to 68.44. That puts the GGGs at a discount of -4.64 to the CME Lean Hog Index. That seems like an "Industrial Strength" spread with only six more trading days until we get to cash settlement. It has been a long time since I have seen such a long trending down movement in the hog market. It is doubtful that the index is near bottom because we are just beginning to see the production from the expansion phase of the "Hog Cycle" start coming to market.

This is being compounded by the continued heavy carcasses. This morning the 6-day moving average carcass weight eased a shade to 216.17#. That is still +2.47# yr/yr. Packer hogs were once again a bit heavier and non-packer hogs were down.

Scalping the Feb cattle/hog spread has been good to me again today and the short futures I have piled on top of the spreads are doing all right too. The long Aug/Oct spreads are going the wrong way. There is a lot of time until the QQQs go to cash settlement so I am not panicing - - - yet.

Best wishes,

dhm.