Pork Futures: Hogs Up; Some New Highs On Spreads, Cattle

CHICAGO - Chicago Mercantile Exchange hogs on Monday closed higher on short covering, April/June and June/July spreading both ways, and live cattle futures' rally that was in part fueled by fund buying and buy stops.
calendar icon 27 February 2007
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"Hogs didn't know what to follow, midday cash being mostly lower or cattle that caught fire," a veteran April hog trader said.

Friday's pork cutout snapback, much-improved packer profit margins and steady to firm early cash sales lifted hogs from opening losses that were caused by buyer caution as investors awaited market direction.

August 2007 through April 2008 lean hogs later set new contract highs on modest Chicago Board of Trade corn's gains. August made a fresh monthly top of 77.07 cents. October's new contract high is 70.30 cents a pound.

April ended up 12 points at 66.87 and slightly below the middle of the trading range. June closed 70 points higher at 77.10, near a session high and under the 77.14-cent 20- and 77.33-cent 10-day moving averages.

Lean hogs stumbled at the start amid buyer trepidation. However, futures slowly inched upward on as much as $2-per--hundredweight-higher Missouri and terminal hog sales due to isolated supply interruptions following a winter storm in the Midwest last weekend.

Nevertheless, the 2007 April trading month had a noticeably negative response to later cash quotes at major direct hog outlets that came in $0.82 to $1.25 per hundredweight lower.

CME hog traders are conflicted about Tuesday's cash trade. Market bulls believe that lighter hog weights may extend some of Monday's cash gains. Meanwhile, bearish participants counter that marketings could increase after roads affected by last weekend's winter storm in the Plains are cleared.

Players on both sides of the board are waiting to see whether the federal government's evening pork cutout meat wire will trend higher or whether Friday's rise was merely a result of fresh bellies' $3 to $5 per hundred weight price hike.

Rosenthal was among April buyers. RJ O'Brien was cited as an April seller.

Source: FXStreet.com

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