3/22/17 WAS down -0.17 to 71.20. The down-trend in the index continued when the 201 report came out this morning, but it was at a slow enough pace to keep the traders holding tight to their long JJJs. Consequently the "Gap" held steady at -3.10 with the JJJs being at a discount to the component. Yesterday the USDA was very late with the 201 report. The component dropped -0.08 yesterday. The Index is on a steady down trend but barely fast enough to close the "Gap" by the time the JJJs go to cash settlement. As the kill rate gets stronger when it should be weakening and the cutouts showing some weakness, packers may start cutting their bids and that could close the "Gap" in a hurry.

The 6-day moving average carcass weight showed a touch of firmness at 212.59$. That is -0.62# year/year. The non-packer producers seem to be current in their shipments. Packers are continuing to bring their hogs to market at heavier weight +3.37# over non-packer hogs. Packers seem to be confident that they can move the pork. Now to see how demand for pork holds up today. The percentage of packer hogs in the daily kill continues to run quite high. Packers may be trying to get more current in their shipments.

This morning I was able to take profits on a long K/M spread that had been hanging around since 6/29/16. Sometimes it takes a lot of patience to trade that spread. It is so very thin that not much happens for weeks on end. There have been plenty of other long K/M spreads that have come and gone while I have been waiting for this one to meet my profit objective.

Best wishes,

dhm