Pork Futures: Hogs finished higher on fund buying

CHICAGO - Chicago Mercantile Exchange hogs finished higher on fund buying, October longs rolling into December and December/February bear spreads.Pork bellies closed narrowly mixed.
calendar icon 5 September 2007
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CME live and feeder cattle posted significant gains.

Despite $2-per-hundredweight-lower Missouri direct cash hog quotes, lean hogs jumped soon after the opening bell, spurred by short covering and October's oversold Relative Strength Index condition. Initial CBOT corn advances motivated rear-month hog buyers.

Futures picked up additional ground after funds pushed the December contract beyond the 40-day moving average threshold. Also, funds filed out of October into December ahead of the Goldman roll period.

The roll consists of funds moving some of their spot-October long positions into December, in accordance with rules governing the Goldman Sachs commodity index. The first of five days of the roll will officially begin on Sept. 10.

On the other hand, October/December forward-spreaders took on the roll because of spot-October's discount to December. And some worked the spread based on an agricultural firm's recommendation to do so on Sept. 4.

Regardless of Tuesday's run up, bearish lean hog sentiments linger, fed by aggressive hog kills and spongy cash hog prices. October and December slipped from session highs as nervous longs sold into upticks. And October encountered stiff moving average technical resistance.

Source: FXSTREET.com
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