Pork Futures: Hogs Mostly Weak
CHICAGO - Lean hogs ended mostly weak on general cash bearishness and heavy technicalresistance. Funds also shifted some of their July long positions into August onthe second of five days of "The Goldman Roll." The Goldman roll is a strategywhere traders shorten long positions in one month by selling the next month'scontract. The strategy usually calls for five days of trading and is based onthe Goldman Sachs Commodity Index.
9 June 2007
2 minute read
Meanwhile, August/October and October/December bear spreads pressured August,underpinned October and lifted December slightly above steady board trading.
Tight packer calculated packer profit margins were reflected in hog prices onFriday that were down more than $1 per hundredweight in parts of the westerncornbelt. What's more, packers had no incentive to aggressively chase hogsgiven lukewarm retail interest in pork product at current levels.
Spot-month hog activity was isolated to traders trying to determine whereJune and CME's hog index will converge when the contract settles on June 14.And, despite the ongoing roll, some traders are attracted to July because ofthe chance that the contract might benefit from a possible cash rebound afterJune exits the board.
"Next week's cash forecast depends on who you talk to," a trader said. "Someguys think smaller supplies will force packers' hand, while others look tocutouts and margins for clues."
Source: FXSTREET.com
