3/23/17 was down -$0.60 and the model projects that th'e component on yesterday's kill will drop between -0.35 and -0.55. With the price of cutouts deteriorating a bit, it looks like packers are getting a bit more aggressive in cutting their bid prices. The "Gap" settled yesterday at -1.85 with the JJJs being discount to the component. It just might be that traders got carried away in driving the JJJs up yesterday. If there is follow-through to the product weakness over the next few days, packers won't put up with lower margin and will fix it by lowering their bids. The kill rate seems to be picking up a little. Last week it was +6.72% higher than one-year ago and so far this week it is +5.49%.

I need to do a little work on my model to see if it will project a cash settlement index for the JJJs. My general feeling is that the JJJs will need to back off a little.

I'm now ready to buy some more Q/V spreads if they dip and have plenty more to sell if they rally. Also have some long K/Ms on my boat looking for a home but will add more on a serious dip.

Best wishes,

dhm