Pork Futures: Most Hogs Firm

by 5m Editor
8 May 2007, at 8:39am

CHICAGO - The Chicago Mercantile Exchange lean hog futures on Monday posted a mostly firm settlement on June/July bull spreading against June longs conducting Goldman Roll business. Most pork belly contracts ended weaker.

Monday was the first of five days of the roll, which for the hog pit, consists of funds rolling some of their spot-month long positions into July and August in association with the Goldman Sachs Commodity Index.

Meanwhile, CME live cattle finished mostly weak while feeder cattle contracts closed firmer.

Lean hogs vacillated in a narrow trading range throughout the session buffeted by conflicting ideas about fundamental direction and divergent technical factors.

Hog futures dipped on the open due to profit taking, an adjustment of the July/July bull spread following Friday's trade and signficant front-month technical resistance.

Nonetheless, steady to firm early cash sales, reduced seasonal hog kills and July's oversold chart condition generated buying on breaks that caused shorts to cover their positions and tripped buy stops. Fund buyers became involved after June and July finally punched through technical resistance barriers.

However, near the close, the board reclaimed most of its morning gains as funds rolled out of June in earnest and cash bids at major direct hog markets were reported lower. Iowa/Southern Minnesota animals sold almost $3 per hundredweight less compared with Friday's sales amid deteriorating calculated packer profit margins.

Cash hog prices are called mixed on Tuesday. This could again cause some bullish traders to cling the sidelines, especially as funds continue to purge themselves of June long positions.


5m Editor