Pork Futures: Hogs, Live Cattle Advance

CHICAGO - Chicago Mercantile Exchange hogs closed higher Monday on short covering, fund buying and August/October bear spreads that slowed spot August's advances but provided added October lift. Pork bellies posted gains during the session.
calendar icon 31 July 2007
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Meanwhile, live cattle ended moderately higher and feeders mostly firm.

Lean hogs rose slightly on the open amid follow-through buying, Friday's steady pork cutout values and talk of no-worse-than-steady live hog bids.Speculative far-month hog buyers waded into thinly traded distant contracts despite Chicago Board of Trade corn that lost ground as the session progressed.

Spot August hogs traded negatively throughout most of the session amid uncertainty regarding near-term cash direction and subsequent direct hog market prices that trended lower. But the contract was eventually pulled up by triple-digit October through February gains.

Some market participants attributed the unusual amount of October and December buying interest to speculation that China might purchase US pork before year's end. Meanwhile, others countered that both contracts' advances were the product of funds squaring positions before the end of the month that might result in profit-taking on Tuesday.

Cash losses are expected to extend into Tuesday as processors struggle with unsatisfactory calculated profit margins. Packers also keep an eye on wholesale pork demand that has slowed somewhat recently because of abundant supplies.

Source: FXSTREET.com
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