Pork Futures: Hogs Surge

CHICAGO - Chicago Mercantile Exchange lean hogs settled higher on fund buying, short covering and forward-spreading. Pork bellies also ended higher.
calendar icon 22 August 2007
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Meanwhile, live cattle posted respectable gains while feeders finished weaker.

Pork futures firmed at the start, strengthened by October and December's over sold Relative Strength Index conditions and initial short covering amid extremely thin volume.

Market participants also worked October/December and December/February bull spreads while awaiting outside market leadership. Buying intensified after October pierced the 100-day moving average ceiling and December put upside space between it and 100-day moving average support.

Furthermore, Chicago Board of Trade corn's rally inspired speculative back-month purchasers.

Fundamentals "played second fiddle" to technical charts because October's expiration is still almost two months away, a broker said. He added that the market may be in for further instability and uncertainty as the Labor Day holiday approaches.

Nevertheless, cash hog prices came in generally weak during the session with more softness anticipated for Wednesday.

Source: FXSTREET.com
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