2/17/17 was up +0.03 to 77.08. That puts the JJJs at a discount of -6.30 to the component. That is quite a hair cut that traders have built into the JJJs especially when you consider that this season when there is a strong historical tendency for the kill rate to decline.

But the last H&P report hinted that the decline this year may be a bit muted.

The 6-day moving average carcass weight Friday firmed to 212.55#. That is -1.78# year over year. There is a good chance that this means hogs have been pulled forward a bit by the packers' higher and higher bid prices. Packers are continuing to bring their hogs to market heavier by 4.28#. I think this is a sign that packers know that they have pork sold and they are trying to produce enough to meet their commitments and they are putting more weight on because they can't produce more pork any other way in the short term.

The percentage of packer hogs in Friday's kill moved up to 35.73%. That is the highest percentage since 11/11/16. I don't think it means packers are now liquidating their inventory of over-weight hogs. A more likely explanation is that they are having trouble bringing in non-packer hogs so they are pulling hogs in out of their barns.

Whatever the explanation, I think one thing is certain - technical/emotional factors are going to be running rampant among traders the next week or so and we are going to see the JJJs make some exaggerated moves. If they are to the down side I will survive on the other hand if they are to the up-side I will thrive.

Best wishes,

dhm