4/4/18 was down -0.43 to 55.07. The dip was not quite a large as the model projected; it might be that packers are accumulating an inventory of cheaper hogs and we will be hit with a larger dip in the next couple of days. At any rate the Purchase Index is a fairly reliable leading indicator of what the component will do so there will most likely be weakness in the component for the next two-days because packers have now purchased some cheaper hogs that are waiting to keep their appointment at the packing plants. It looks like the JJJs have settled discount to the component by -2.67 suggesting that traders are thinking, "Lower still!"

The six-day moving average carcass weight firmed to 215.54#. That is plus 2.23# Yr/Yr. Index hogs were also heavier at 214.75#. Packers are continuing to bring their hogs in heavier by 2.96# yesterday. Both packer hogs and packer hogs were a bit heavier. My read on these carcass weights is that producers are not getting their hogs shipped quite a rapidly as hogs are finishing. Yesterday the percentage of packer hogs in the kill mix fell back to the more "Usual" level.

I covered the pair of short MMMs today but am still short the JJJs along with a boat load of calendar spreads. I liked the way the V/Zs treated me today.

Best wishes,

dhm