Pork Futures: Hogs Sag

CHICAGO - Despite supportive fundamentals, lean hogs closed weak on July/August bulland August/October bear positioning that was linked to "butterfly" spreads.August, which represented the butterfly's body, was sold while July and Octoberwere bought during the spread, which symbolized the butterfly's wings.
calendar icon 14 June 2007
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Meanwhile, July/August bull spreaders challenged July longs who shifted someof their positions into August on the last day of the Goldman Roll that is tiedto the Goldman Sachs Commodity Index.

The Goldman Roll began Thursday and officially ended on Wednesday. However,some cleanup roll business is expected to linger after the roll period intoFriday because of July's sizable open interest.

Although bullish traders were initially disheartened by early $0.50-to-$1 perhundredweight lower Missouri direct cash hog prices, Iowa/Southern Minnesotahog's subsequent $4 jump provided moral support.

Another positive sign for long positioners were pork cutouts that on Tuesdaycontinued to recover due to less aggressive daily hog slaughters. Also, pitbulls were inspired by slowly improving estimated packer profit margins.

Nonetheless, that slew of positive fundamental influences was not enough tomotivate longs into action, with several abstaining until after June expires onThursday at 1 p.m. EDT (1700 GMT) and bulk of the roll is completed.

Country hog buyers see cash gains extending into Thursday.

Source: FXSTREET.com

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