Pork Futures: Hogs Fall

CHICAGO - Chicago Mercantile Exchange hogs settled lower on cash hog price worries, commercial selling and consistent December/February bull and February/April bear spreads. That minimized December and April's losses but worsened February's decline.
calendar icon 18 October 2007
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Pork bellies closed sharply lower and posted fresh contract lows.

Meanwhile, live cattle finished down slightly and feeder cattle settled lower.

As they've done the past three sessions, lean hogs sprinted upward on the open amid short covering only to run out of steam as buying abated. Although steady cash quotes were also behind the board's initial spike, later cash weakness was partly responsible for future's subsequent lapse.

"Selling breaks and buying rallies appear to be the norm now," a hog broker said. "I'm selling upward momentum because it's not going to last long and buying lows because the market goes up the next day."

However, employing that strategy heading into the weekend becomes a tad tricky, another broker said. Shorts made money this week and would likely ring the register on Thursday to beat the weekend rush, he said.

Country hog buyers anticipate extended cash weakness for Thursday.

Processors looking to pad inventories for another massive weekend kill might put steady money on the table, a trader said. However, he said, look for cash pressure from packers who have animals already booked into early next week.

Front-month hog futures sank deeper into oversold territory that might arouse speculative bargain hunters on Thursday.

Source: FXSTREET.com
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