2/20/17 kill was UP +0.38 to 77.46. The JJJs are now trading discount to the component by -6.68. As I was looking at the noon reports and calculating the first projection for the Purchase Index for today, I noticed that the "Negotiated Hogs" were generally a little weak. It is possible that is a leading indicator that packer are getting tired of paying higher and higher prices for hogs.

My model is still projecting a higher Purchase Index for today and a higher component on today's kill.

The six-day moving average carcass weight eased to 212.21#. That is -0.51# year/year. Packer hogs are +3.74# heavier than the non-packer hogs. The higher percentage of packer hogs in the kill-mix is closing the weight "Gap" between packer and non-packer hogs. It is not clear whether packers are killing a larger share of their owned hogs because they are wanting to get more current in their shipments or whether they can't find hogs and are having to increase the shipments of packer owned hogs. I'm thinking the latter but I am NOT betting the farm on it but I am long the JJJs.

Best wishes,

dhm