2/23/18 dropped -0.67 to 69.03. The JJJs settled premium to the component by +0.97.

The six-day moving average carcass weight moved up to 215.04#. That is +2.41# yr/yr. Index hogs were also heavier at 215.03#. Packers are continuing to finish their hogs heavier than non-packers by +1.18#. These numbers may be telling us that producers have fallen behind a little in their shipments so the kill may stay firm for a while before the spring dip in the kill sets in.

The USDA calculates that packers were getting 80.27/cwt for the carcasses. That was up +0.79 over Friday but down from 84.54 on this date last year. One year ago the JJJs were trading at 68.125. Packers' margins are not as good this year as they were last year. Last year from this date until the JJJs went to cash settlement, the JJJs gave up about six points. Looking at the way hogs are coming to market and the firmness of the six-day moving average carcass weight, it could happen again this year.

I'm flat the JJJs at this point but my take on the data seems to be saying that I should be short.

Best wishes,

dhm