4/7/15 was UP +$0.48 and the model projects that the CME Lean Hog Index component on the 4-7-15 kill will move up something like +0.10 to +0.40. It appears that we have now moved through the "Trough" for the Index and it is now embarked on the spring advance.

I don't know how fast it will advance nor do I know how high it might eventually go.

Here are some of the things I am watching:

- The cutouts remain weak and still trending downward. Yesterday they were down again by 0.38 being pushed by the bellies dropping about 3.5 points.

- The dollar continues be strong and that makes exporting pork more difficult.

- The scheduled number of hogs came back strong yesterday with 13.51% more scheduled than was scheduled on the same date last year. It was also up 162K over the same date last week.

- Packers made a solid purchase yesterday at 96.6% of the moving average daily purchases. In order to get these hogs lined up, packers had to sweeten the purchase Index by $0.48. Mostly likely we will see a small surge in the component a little later this morning.

- The six-day moving average carcass weight continues to fall. This suggests that producers have been aggressive shippers of hogs and are quite current in their shipments. Even so, the 6-day moving average carcass weight is +6.37# heavier than in 2013.

- The CME Lean Hog Index component will need to move up by an average of 0.44 from now until expiry to get the index up to the 62.70 where the JJJs are trading.

As I juggle these data points over in my mind, I come to the conclusion that I would prefer to be short the JJJs rather than long knowing full well that packers may put a lot of money on their bids very quickly if there is a tightening of the supply of market-ready hogs. I'm now short two JJJs and will sell more if we get a decent rally. The +0.250 we just saw almost tempted me but I decided to hold out for 62.90 which may never happen.

Best wishes,

dhm