3/7/17 was UP +0.07 TO 72.63. It was lo,oking like packers were turning their bids higher but it showed up as a bounce in the index component a little sooner than I was expecting. With the bounce the JJJs gave us today, the "Gap" is now closed to -4.21 with the JJJs at a discount to the component being. I had been thinking that the JJJs were going to jump a point of two as a part of the "Gap" closing process. I think there is another half to point and a half coming. The kill so far this week is coming in somewhat weaker than expected.

Yesterday packers killed a lot of their own hogs again. Packer hogs were +3.09# over non-packer hogs today. Not long ago the were more than 4.0# over. It looks like packers are moving out some of their heavies and it just might be that they are moving them out because they are not getting the non-packers hogs they want. We just might be starting to see why packers were finishing their hogs to heavier weights. Sometimes the USDA misses on their hog count. It doesn't look to me like the kill numbers for the last several weeks are in harmony with the lasts H&P report.

I continue to believe that "Packers know best." My problem is that I don't know what packers know. Going by the scant evidence that they have been finishing hogs to heavier weights, I am surmising that packers know they need to add poundage to each pig in order to get the pork they want and that is a bullish signal.

I uncovered the short puts and got long a few JJJs this morning. Tomorrow I may have some wounds to lick, but for now it looks good.

Best wishes,

dhm