Pork Review: Profiteers Undercut Hogs; Bellies Sink

CHICAGO - Chicago Mercantile Exchange hogs settled lower Friday on profit taking, speculation about near-term cash declines and spreads that included August/October bear positioning linked to the Goldman Roll.
calendar icon 17 July 2006
clock icon 2 minute read
The roll, which is tied to the Goldman Sachs Commodity Index, was in its final day but residual business is likely into early next week.

An estimated 10,000 to 12,000 contracts were connected to Friday's roll activity.

Limiting buying interest were pork cutouts' setback on Thursday, CME's index continued slide and this week's slaughter buildup compared with a year ago. Also, July was subject to bearish speculation about where the contract would settle after it expires on Monday at noon CDT.

"Nothing was going on in July because it's set to expire on Monday, but the guys who were still in there were surprised how much August fell because after July goes off the board August is going to look cheap," a hog broker said.

Although hog investors were concerned that banned beef found in U.S. turkey and ham shipments to Japan might have negative implications for pork exports, the situation was not blamed for Friday's bearish hog trade.

Source: Dow Jones Newswires via Cattle Network
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