The CME Lean Hog Index component on the kill for -

3/13/18 was down -0.43 to 66.16. We continue to be in a powerful down-trend. The JJJs are now trading premium to the component by +1.19. On Monday packers purchased huge numbers of hogs and yesterday the number was about as small as I have seen for a while.

The six-day moving average carcass weight was steady at 214.70# That is +1.98# yr/yr. Packer hogs are only +0.45# heavier than non-packer hogs. It wasn't long ago that packer hogs were running nearly 2.0# heavier than non-packer hogs. It appears that lately packers have been busy liquidating their inventory of market hogs. I don't view that as a very good sign of things to come. This morning the Purchase Index was down -0.49. This suggests that packers are building an inventory of purchased hogs at lower prices so I am suspecting the component will decline again over the next couple of days.

Yesterday packers only purchased 85.9 % of the moving average daily purchases but on Monday they purchased 221.9%. That's the largest one-day purchase I ever remember seeing. With a large Monday purchase and seemingly packers being on a mild liquidating binge for their hogs, the stage may well be being set for weakness in the component for the rest of this week.

This morning I took two bravery pills and sold a June cattle/hog spread at 37.35. Perhaps I should have checked with ITZ before I did that. I am still flat the JJJs but have enough calendar spreads working to keep me busy. In fact they are interfering with my Forum posting.

Best wishes,