3/23/15 was down 0.56 putting the CME Lean Hog Index at 61.50 on the 3/23/15 kill. The JJJs are now discounted to the Index component -2.72. Traders are expecting packers to continue lowering their bids between now and 4/15/15 when the JJJs go to cash settlement. Considering the rate of decline in the index, I suppose it is possible for the Index to fall enough to push the JJJs even lower.

The six-day moving average carcass weight came in at 214.25#. That is down -0.28# from the same date last year. The decline in the carcass weight and the high kill rate has me wondering if producers are now shifting to the liquidation phase of the hog cycle. I need to pour over the data to see if there are some clues that will answer that question.

I did sell a ZZZ at 63.125. At this point it doesn't look like a very good idea. It wouldn't be so bad if the K/M spreads were treating me well, but they are not!!

Best wishes,

dhm