Pork Futures: Most Hogs Fade

CHICAGO - Chicago Mercantile Exchange hogs closed moderately lower Friday on pre-weekend position squaring that included traders selling backmonths and landing into forward contracts.
calendar icon 21 July 2007
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That, along with general cash firmness, propped up spot August and slowed October and December declines, butheavily pressured distant hog months. Pork bellies closed flat to weak.

Meanwhile, live cattle settled flat to firm and feeders steady to upslightly.

Lean hogs spiked on the open as shorts continued covering positions amid mounting futures and fundamental uncertainty heading into the weekend.Front-month upward momentum, also attributed to fund purchasing, put August in conflict with the 100-day moving average threshold and several times pushed October to new contract highs where sellers were waiting.

Although August posted a moderately higher finish, it fell from a session topafter finally breaking through, but ultimately losing 100-day moving average support. What's more, bullish traders became increasingly uncomfortable withAugust's and October's upward momentum that widened both contracts' bearish premiums to CME's hog index.

Country hog buyers anticipate steady to firm cash hog bids from packers tostart the week. Hog market bulls believe processors might chase hogs due to more talk of warmer temperatures in the Midwest next week and producers who arecurrent in their marketings.

On the other hand, bearish traders point to ramped-up kills this week as asign that supplies are plentiful. Also, those holding short positions in the market contend processors may only show interest in cash hogs as long as pork cutouts remain stable.

Source: FXSTREET.com
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