4/3/15 was down -$0.66 and the model projects that the CME Lean Hog Index component on the kill 4-3-15 will drop between -0.30 and -0.60. Earlier in the week there was a hint that the "Bottom" might be close at hand for the packers bidding but Friday's action seems to put an end to the idea, at least for a while yet.

Packers made only a fair purchase on Friday at 85.2% of the moving average daily purchases. The number of hogs they have scheduled is still strong at +8.03% higher than the same date last year. It is possible that a portion of the high number represents some liquidation of heavies by producers. The six-day moving average carcass weight Friday was 214.47#. That is -1.13# below the same date last year. Packers are getting current in their shipments.

The JJJs are premium to Thursday's component by +3.62. With the prospects that Friday's component is going to be firm, the "Gap" could bust through 4.0 this morning. And there are only eight more days before we get to cash settlement. It takes and average gain of +0.60 to pump the CME Index up to the 63.40 where the JJJs are trading. Considering the firm kill rate, softness of the cutouts, this packer margins and big numbers in the last H&P report, that may be a tall order.

I sold a pair of JJJs at 63.375. I may rider them into cash settlement.

Best wishes,

dhm

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