2-9-15 was down -$0.37 and the model projects that the component on the 2-9-15 kill will fall between -0.45 and -0.75. This suggests that the down trend in hog prices is still going on but the rate of decline may be slowing. The data seems to continue to point to the probability that we are now in the expansion phase of the "Hog Cycle". I don't know just how to trade this thing because they only come around every four to seven years. Furthermore, the "Hog Cycle" has been a bit tame the last several cycles.

Perhaps that is because packers now represent a larger percentage of the producer population.

After today, we only get four more days of data before the GGGs go to cash settlement. With the GGGs discounted to the component by -4.29, the stage may be set for the GGGs to put on a mild rally of a point or two.

So -

I will be covering the short GGGs today and might even get long.

Looking beyond the GGGs, I'm not very confident of a trading strategy. Since the H&P report came out indicating that we are in the expansion phase of the "Hog Cycle" the GGGs have shed -20.375. I am thinking that there is the possibility that the other months may experience a similar decline. If that were to turn out to be the case, the JJJs could shed -3.325, the KKKs -9.475, the MMMs -10.30 and th4e NNNs -12.025.

Most likely it will be a bumpy ride, but I will keep looking at these numbers as a possible target level.

I still have a some long Q/V spreads and they are doing me no good. I just have this feeling that the fall kill will be strong enough to cause the VVVs to retrace a little.

Best wishes,

dhm