According to the Hightower report, it wouldn't take much crop worries to drive the expected next crop stocks/use ratio from 13% expected to 7%...
That LEM:N15 spread is textbook mean reversion. That spread got out to a standard deviation or 2 away from the mean, and someone jumped in with some decent volume and brought it back. Very interesting.
I'm not really sure what's keeping hogs down. Last I looked, the cattle/hog spread has gone thru the roof. I guess the substitution is a sign of a good economy. Meats are more optimistic than the stock market it seems.
Apparently( Common explanation around ) we have an oversupply of hogs at a time when exports are struggling because of the strong dollar. One thing is sure I won't try to catch that bottom a second time...LOL
I was talking to the owner of a feed mill in rural NE, and he had heard that some are worried that the hog market could absolutely fall apart in the middle of 2016. I asked him the reasoning, and he was saying they are predicting a massive oversupply. This is the first I've really heard of this, not really sure as to the reasoning behind it.
Out @ 29.49. Another loser. It went straight to my stop. As Rachmaninov said, those same product spreads based on correlation shouldn't be done in the last month before expiry. Lesson learned.