3/9/17 was down -$0.20 and the model projects that the component on the 3/9/17 kill will drop between -0.15 and -0.45. Yesterday the JJJs settled discount to the component by -4.47. That is a significant "Gap" but packers know how to close "Gaps" if their margins are at risk.

With their mildly lower bids, packers made a fairly good purchase yesterday at 91.6% of the moving average daily purchases.

I continue to think that the JJJs will participate in the "Gap" closure by showing a little strength by the time that we get to cash settlement but it may be a bumpy ride getting there. I'm still short a few naked 65 and 66 puts and long a little on the JJJs. Pre-opening suggests that I have it all wrong.

Best wishes,

dhm