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Pork Futures: Hogs Hit 2-Month Lows On Spreads, Charts

by 5m Editor
22 March 2007, at 8:26am

CHICAGO - Chicago Mercantile Exchange hogs settled lower, with April and June diving to two-month bottoms, amid April/June, June/July and July/October bear spreading. Front-months were also under considerable technical pressure that at times stirred fund liquidation.

April and June's bearish premiums to CME's hog index, Tuesday's pork cutout discount and pockets of depressed cash bids contributed to declines despite Chicago Board of Trade corn that climbed steadily as the morning progressed.

Potential buyers also became skittish after Iowa/Southern Minnesota average hog weights for last week were up slightly from previous week and year-ago weights.

Spot April closed 70 points lower at 63.37 cents a pound.

Actively-traded June closed 80 points lower at 73.55 cents.

Investors searched desperately for fundamental leadership that was sorely lacking. Traders on both sides of the board became even more apprehensive after cash prices at Iowa/Southern Minnesota were quoted up $0.85 per hundredweight while cash values in the western corn belt dropped $2.48.

Country hog buyers anticipate steady to weaker cash bids on Thursday. This runs contrary to opinions by hog market bulls who believe that producers are moving market-ready hogs ahead as a precaution against further cash cuts. This, they said, will force packers to pay up for hogs as early as Thursday or early next week.

Source: FXSTREET.com

5m Editor