2/22/17 kill was down -0.18 to 66.40. Currently the JJJs are trading discount to the component by a very substantial -11.24. Obviously traders are convinced that packers are going to be letting the air out of their bids. Looking at the way bellies are collapsing, that just might be the case. Packers did not run a particularly large number of their hogs through their plants yesterday.

The six-day moving average carcass weight firmed to 212.36#. That is -0.56# year/year. It appears that producers are very current in their shipments. As I follow the data, it appears that 92% to 95% of the pork is being traded outside of the reach of the mandatory price reports system. I suspect some of that is forward sale agreements with retailers and processors. I notice historically there is a very strong tendency for the October futures to gain relative to the August in the mid-January to early March time period. I'm beginning to think that is because retailers are placing orders for holiday pork and packers hedge their sale with October futures and that drives the October up relative to the August. What ever the reason, it seems to happen year-after-year.

Packer hogs are still running 3.51# heavier than non-packer hogs. Maybe packers missed the boat by not getting current when pork was higher. Or maybe packers have enough pork forward priced to sell their pork and know what they are doing.

Best wises,

dhm