Pork Futures: Fundamentals, Funds Rack Cattle, Hogs

CHICAGO - Lean hogs ended lower on uneven cash quotes, Tuesday's pork cutout discount and unprofitable estimated pack profit returns. June/July and June/August bear spreading were common as a few spot June traders bailed ahead of the contract's June 14 expiration.
calendar icon 7 June 2007
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Meanwhile, longs shifted some of their July positions into August in preparation for the first of five days of the Goldman Roll that will kickoff on Thursday. The roll is done is conjunction with the Goldman Sachs Commodity Index.

Pork futures at the start wasted little time trending lower after cutouts late Tuesday unexpectedly fell $1.36 despite reduced hog slaughters so far this week. Some in the pit believe diminished kills may be a result of packers trimming plant operating hours to offset negative margins.

July was racked by fund selling after the contract gapped below the 40-day moving average on the open, and later violated 10- and- 20-day moving average supports.

Country hog buyers forecast cash hog bids steady to down as much as $1 per hundredweight for Thursday.

Nonetheless, perma-bulls are not willing to give up the ghost after seeing isolated cash firmness at terminal and direct hog markets on Wednesday. A market bull also pointed to dwindling slaughter rates that, he said, could support to pork cutouts.

Technically, June and July now have upside technical gaps to traverse on Thursday. And, July settled beneath 74.29-cent 20-day and 74.39-cent 10-day moving average resistance.

Source: FXSTREET.com

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