4/3/17 was down -0.37 to 66.85 putting the JJJs at a discount of -2.53 to the component.

he six-day moving average carcass weight declined to 213.15#. That is -0.68# yr/yr. The Index hogs are lighter at 212.25$. The weight of packer hogs was down nearly 1/2#. Packer hogs are only 2066# heavier than non-packer hogs. The higher percentage of packer hogs in the kill mix is getting packers more current in their shipments of their hogs.

The component has dropped an average of -0.422# a day over the past eleven days. There is a good chance that the available hogs is slowly beginning to tighten so rate at which packer cut their bids may slow. Assuming packers packers cut at 75% of that rate going forward, the model projects the cash settlement index will be 64.16 with a range of 63.66 to 64.66. It appears that the JJJs are appropriately priced. I will continue to scalp by selling rallies and buying dips. The model is done an excellent job keeping me on the correct side of the JJJs as we move toward cash settlement. This morning I sold a handful of 66 call. The model seems to be saying we are not going back up to there.

Best wishes,

dhmd