Pork Futures: New Feeder Highs
CHICAGO - Lean hogs settled higher on fund buying after spot August punched through 100-day moving average resistance, and August/October bull spreads. Also,October/December bear spreads slowed October's upward progress but pushed December to a 70.30-cent contract high.Deep-deferred hog contracts posted surprising triple-digit gains as sometraders worked April/2008 August bull spreads. And, speculative buyers ventureddeep into hog months despite CBOT corn contracts that traded in negativeterritory throughout the morning.
Pork futures opened mostly weak as traders grasped for fundamental and technical leadership at the start of the week. Potential buyers were also apprehensive about August and October's relative expense compared with CME's hog index.
Furthermore, market bulls were apprehensive about October's overbought Relative Strength Index condition. And, Friday's USDA cold storage survey showed a significant pork stock increased versus last year that was also exacerbated by a bloated ham inventory amount.
However, pockets of cash firmness and impressive estimated packer profitmargins stirred August/October hog bull spreads. And, a handful of participantsbought August hogs outright as suggested by an agricultural research firm to do so on July 23.
Country hog buyers foresee steady to firm cash hog prices for Tuesday.
But, some players already wonder whether Monday's hog futures surge was warranted given the board's inability to sustain rallies or big breaks. And, August and October's premiums to the exchange's hog barometer again will become a contentious issue on Tuesday.