Pork Futures: Hogs settled lower

CHICAGO - Chicago Mercantile Exchange hogs settled lower on fund liquidation, sell stops and China's recent suspension of imports from several U.S. pork processors. Also, pork bellies posted losses on the day.
calendar icon 17 August 2007
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Meanwhile, live cattle finished down sharply and feeders lower.

Lean hogs dropped on the open amid follow-through selling, skittish buyers and confirmation by the U.S. Department of Agriculture on Wednesday that China banned imports from seven more U.S. pork packing plants because of ractopamine concerns. One U.S. hog processor was suspended by China earlier this month.

Ractopamine is used in the U.S. to promote lean muscle in hogs rather than fat. The chemical isn't approved in China.

Large hog slaughter rates, lower cash hog prices and Chicago Board of Trade corn's retreat worsened pork future's problems on Thursday. Also, the melt down in the financial and equities markets prompted funds to liquidate some of their lean hog holdings.

Hog's downward momentum at one point knocked October and December to their lowest levels in five weeks. What's more, December and April bounced off the300-point daily price limit floor.

Nevertheless, speculative bargain hunters and short covering lifted hog futures from session lows. Additionally, October and December's extremely oversold technical conditions, improved calculated packer profit margins and additional profit taking by shorts may help futures mend on Friday.

Source: FXSTREET.com
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