Pork Futures: Hogs Gain after erratic trading

CHICAGO - Lean hogs closed firmer on short covering, and June/July bear and July/August bull-spreading that sometimes slowed June and August advances but elevated July above major moving average resistance levels.
calendar icon 31 May 2007
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Also, potential hog bulls wandered into far months as CBOT corn ticked upward as the morning progressed.

Hogs traded erratically for most of the session as traders searched for market direction from fundamentals that were murky at best.

Cash bids were generally steady at the start, then splintered depending on processor needs heading into Saturday's slaughter and next week - the first full kill week after the holiday.

Market bulls think packers may up bids for animals to accommodate a relatively hefty weekend slaughter.

On the other hand, bears point to unsatisfactory packer margins and this week's big kill. These, said bearish traders, are signs that packers might be content to process hogs during the week, which were backed up over the three-day holiday, rather than post a big Saturday kill.

Traders on either side of the market are keeping tabs on pork cutouts that gradually gained ground the past two days in a row that some owe to retailers re-stocking meat cases to satisfy post-holiday grilling. However, short-position holders counter that cutouts might suffer if daily hog slaughters remain above the 400,000-mark much longer.

Source: FXSTREET.com

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