Pork Futures: Hogs Fall

CHICAGO - Except for spot-August Chicago Mercantile Exchange hogs that settled up slightly after their 1 p.m. EDT expiration, other months ended sharply lower Tuesday.
calendar icon 15 August 2007
clock icon 2 minute read
Pork bellies closed unchanged to down sharply.

Meanwhile, most live cattle contracts ended up slightly, and feeders finished firm.

Most lean hogs spiked at the start, driven by follow-through buying. However,that ultimately gave way to trailing cash hog prices and opinions that the October contract may be inundated with hog supplies this autumn. Furthermore,bullish hog traders were disappointed that U.S. pork buying from China had not panned out as they anticipated, a broker said.

Also, some in the pit pointed to recent U.S. export data that showed a 3.5%decline in pork shipments during the first half of 2007 versus the same period last year.

Fund selling surfaced after a technical-oriented trader, who "loaded up" on the buy side of the market last week, liquidated a large number of those positions on Tuesday, a trader said. The downward board action generated additional selling, especially among those who were thought to be momentum traders, he said.

Country hog buyers anticipate further cash weakness on Wednesday. That may not bode well for October futures even though the contract's expiration is two months away, said brokers.

Source: FXSTREET.com
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