Pork Futures: Hogs Jump As Funds Buy

CHICAGO - Chicago Mercantile Exchange lean hog futures closedhigher Wednesday. Gains came from fund buying and August/October bear spreads that limited spot August advances but, along with bull spreading into Octoberout of back months, pushed October to a 72.85-cent new contract high.
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Pork bellies closed steady to higher.

Meanwhile, live cattle settled flat to firm and feeders mixed.

Lean hogs spiked at the start on spillover buying that soon dissipated because of August's premium to CME's hog index and the notion that Tuesday's limit-up sprint was unwarranted. October selling kicked in when the contractinitially made a fresh high.

Nevertheless, with the exception of August that loitered in negative territory most of the morning, other hog contracts resumed upward momentum when October again became the target of bullish opinions regarding China that sentshorts running for cover.

Speculation swirled in the hog pit that if China purchases U.S. pork, the country would do so possibly this autumn or winter. That, a broker said, wouldnot affect August, which will expire in about a month, but could support October and the December contract that also made a 70.10-cent new contract high.

August eventually moved up from session lows, and briefly traded in thegreen, due to general cash firmness, pork cutout's commendable performance and ideas for cash firmness for Thursday. What's more, Chicago Board of Tradecorn's strength as the morning progressed generated distant-month hog buying interest.

Source: FXSTREET.com
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