The CME Lean Hog Index component on the kill for -

4/11/18 was down -0.31 to 52.86. I looks like the JJJs are settling premium to the component by 0.64. The model was quite accurate this morning in projecting the amount the component would be down on yesterday's kill. Generally when the Purchase Index is down, there needs to be a couple of "UP" days in the Purchase Index before the component will reverse course and head higher. I get the impression that packers have a certain degree of flexibility in choosing the batch of hogs they will kill on any given day but the data seems to be suggesting that the probability is quite high that a portion of the +0.64 "Gap" will be closed by the JJJs backing down a little. This morning I sold four of the JJJs at 53.75 with the idea of taking them to cash settlement on Friday.

The six-day moving average carcass weight eased to 215.11#. That is +1.76# yr/yr. Index hogs were also a bit lighter at 213.96#. Packers are continuing to ship their hogs heavier by 2.06#. The percentage of packer hogs in the kill mix is now running near the "Usual" level suggesting they are now fairly current in their shipments but are wanting to kill heavier hogs.

Best wishes,