The CME Lean Hog Index component on the kill for -

4/9/19 was up +0.27 to 79.42. The JJJs settled discount to the component by -0.52. I am long a few JJJ pigs to take to cash settlement. The bellies sold well yesterday and that pushed the carcasses up nearly a point to 83.94. With the component at 79.42 packers only have a gross profit margin of 4.52 per cwt. That's an improvement over yesterday but a bit shy of what I think packer would like.

The 6+day moving average carcass weight firmed to 214.95#. That is -0.16# yr/yr. Packer hogs were up about 1/3# making them 3.97# heavier than the non-packer hogs. Index hogs were lighter at 212.83#. If hogs have been pulled forward as the numbers seem to indicate, it just might be that it is the Index hogs that have been pulled forward. If that is the case and we get the "Usual" spring decline in the kill, packers may find themselves chasing after some index hogs that have already been killed. At this point in time this does not make me very bullish but one thing is for sure - it does not make me bearish!!

So far this week I have been able to flip quite a few of the K/M calendar spreads.

Best wishes,