3/7/17 was down -0.09 and the model projects that the component on yesterday's kill will drop between -0.15 and -0.45. Packers are gradually decreasing the rate at which they are cutting their bid prices. The kill is coming is bit shy of projections from the last H&P report. It may be that producers pulled hogs forward earlier in the year or it may be that the inventory of market hogs is not quite up to the USDA projection. It appears that non-packer producers are quite current in their shipments.

Packers only purchased 86.5% of the moving average daily purchases yesterday. This may suggest that they will bid a bit more aggressively today. Based on the continued weakness of the bellies, I don't think they will be bidding a lot higher.

I have uncovered all of the short puts. The fundamental scenario tells me that packers will NOT drop the index all the way down to where the JJJs are trading and part of the "Gap" closing will be from the JJJJs showing a little firmness.

Best wishes,

dhm

PS: I sold a June cattle/hog spread at 29.80, ITZ. Have I shot myself in the foot?