4/7/17 kill slipped -0.65 to 64.86. The JJJs are now trading discount to the component by -1.66. The index is still trending lower. Over the past ten days the component has dropped an average of 0.51 per day. There doesn't seem to be anything in the data suggesting the down-trend is ending for a few days. On the assumption that the down-trend going forward will be 90% of the last ten-day average, the model projects that the cash settlement index will be 62.80 with a range of 62.30 to 63.3. The risk of being short does not seem to be too great so I will stick with a few short JJJs and sell more on a bounce.

The six-day moving average carcass weight moved up to 213.55#. That is -1.06# yr/yr. Producers seem to be staying current in their shipments. Packer hogs are +2.12# heavier than non-packer hogs but packers seem to be killing extra of their hogs and they are getting more currrent in their shipments. Spring almost always brings a reduction in the kill rate and it may again this year. There are so few days until the JJJs expire that it is questionable whether the higher kill with get here in time to give the JJJs a bounce.

Best wishes,

dhm