Pork Futures: Hogs Wilt On Spreads, Roll; Bellies Tumble

by 5m Editor
13 March 2007, at 6:13am

CHICAGO - Chicago Mercantile Exchange hogs settled lower on April/June bull spreading against the shift by April fund longs into June on the eve of the final day of the Goldman Roll on Tuesday that is tied to the Goldman Sachs Commodity Index.

April and June's bearish premiums to CME's hog index, trailing Chicago Board of Trade corn contracts and initial cash pressure dragged on pork futures throughout the session.

Spot April ended unchanged at 67.95 cents a pound and slightly above the middle of the trading range.

Actively-traded June closed 127 points lower at 77.47 cents, near a session low and outside Friday's high and low.

Pork futures spiked on the open due to short covering and Friday's almost $1.00 pork cutout jump. What's more, last Friday's double-digit calculated packer profit margins stirred talk that processors might hike bids for hogs to keep pace with impressive margins and relatively strong wholesale pork demand.

However, board selling developed amid ideas that gains were widening the board's bearish premiums to CME's hog index and moving April and June closer to overbought Relative Strength territory. Nevertheless, spot-month selling later subsided after cash sales at major direct hog markets were reported much higher than expected.


5m Editor