Pork Futures: Hogs Rise On Funds, Buy Stops; Bellies Drop

CHICAGO - Chicago Mercantile Exchange hogs on Wednesday closed higher on fund purchasing, buy stops and technical-related buying after April and June filled previous chart gaps on the final day of February trading.
calendar icon 1 March 2007
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What's more, spreading out of the spot April contract into back months, areas of cash strength due to wintry weather in the upper-western cornbelt and Chicago Board of Trade corn advances contributed to hog gains. Upward momentum also pushed July and August hog contracts to 78.30- and- 77.25-cent fresh monthly tops.

Spot April ended up 32 points at 67.75 and slightly above the middle of its trading range after topping out at a 1 1/2-week high. The contract settled above 67.57- and- 67.47-cent 10-and- 20-day moving-average support levels.

Most-actively traded June closed up 60 points at 78.05 cents and in the upper half of the trading range.

Lean hogs were staggered on the open by Tuesday's pork cutout relapse, profit taking by longs after front month's modest gains near the settlement on Tuesday and initial spot-month chart pressure. Prospective buyers also hugged the sidelines as they digested increased week-over-week average Iowa/Southern Minnesota hog weight information and subsequent market reaction after Tuesday's commodity/financial markets collapse.

However, selling subsided after some cash quotes came in higher-than-expected due to inclement winter weather conditions. And June marshaled support after it held above prime moving average support levels. Buyer interest intensified after April and June moved above 68.00- and- 78.00-cent psychological resistance thresholds that triggered stops along the way.

Whether the board will be able to extend the day's rally into Thursday is questionable given the relative lack of fundamental backing on Wednesday. And, recent daily hog slaughters consistently above 400,000 head are signs to market bears that supplies are on the move.

Source: FXSTREET.com

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