2/24/16 was, to my mild surprise, down. Not by much -0.04. That puts the component at 66.50 which is 4.40 under the JJJs.

It is very difficult to know which batch of hogs that packers have purchased will be killed on a given day. Yesterday they ran cheap hogs through. If the numbers I pick up are correct, that means there are a few more expensive hogs that will be killed in a day or two giving us a compensatory jump in the component when they hit the packing plants.

The 6-day moving average carcass weight firmed to 213.26#. That is -1.64# year over year. Packer hogs are only+0.63# heavier than non-packer hogs. It was not long ago that packer hogs were running nearly 2.5# heavier than non-packer hogs. Packers have seemingly liquidated a fair number of their hogs being held for market. Index hogs are a bit lighter at 212.52#.

Cutouts have been up/down, up/down for several weeks but they are up 6.15 since 12/31/15. That seems to me to be a constructive sign for the hog producers. There may be more to come if the last H&P report was correct. I need to do a little work on the kill since 12/1/15 but my gut feeling is that the last H&P report was fairly good and the declining carcass weight has my attention because it may be suggesting that the decline in the kill may arrive a bit before suggested by the report.

That does not mean the index will move much higher because there seems to be an ample amount of red meat and poultry available for the consumer.

On the other hand, it probably is not very bearish. Last year from this date until the expiration of the JJJs the index dropped -1.22. I don't think that will happen this year. The "Gap" says that traders think the index will jump 4.40. At this point I am not willing to contradict "The Market".

I just bought another JJJ Pig at 71.075 when the market dipped.

Ka!! Ching!! Another K/M spread just hit my profit objective. My boat is NOT riding high in the water quite yet.

Best wishes,

dhm