Pork Futures: Hogs Hit Multi-Month Lows

CHICAGO - Lean hogs ended lower, with front-months sliding to five-and-a-half-month bottoms, on general cash hog price weakness and July/August and July/October bear spreading. Also, August longs moved into October also ahead of the July 9 start of Goldman roll in the hog pit.
calendar icon 27 June 2007
clock icon 2 minute read

Additional negative market factors included Monday's pork cut out lapse and talk that processors may intentionally trim plant operating hours to stimulate lackluster calculated profit margins.

Conversely, lower hog slaughters might result in less product moving into wholesale channels that might under gird sagging pork cutouts.

Short-term fund liquidation and sell stops contributed to spot-July hog losses. By the same token, long-range funds bought August on breaks, accordingt o pit trading sources.

After some cash hog bids during Tuesday's session came in down as much as $2per hundredweight lower, traders and country hog buyers anticipate extended cash bearishness for Wednesday.

The federal government's Iowa/Southern Minnesota weekly average hog weights are on tap for Wednesday. The data will be scrutinised to see whether producers are current in their marketings after some hog farmers pulled hogs ahead to side-step lower cash bids.

Technical, July and August ventured further into oversold chart turf that might motivate break-buyers on Wednesday. Front months are also at a significant bullish discount to CME's hog index.

Source: FXSTREET.com
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