Pork Futures: Hogs Slide

CHICAGO - Lean hogs closed lower amid concerns that cash hog prices may have peaked for the week, commercial liquidation and sell stops.
calendar icon 17 October 2007
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What's more, front-month "butterfly" spreads were common. That consisted of selling February, which symbolised the body of the butterfly, and buying December and April, which represented the butterfly's wings.

Following an established pattern the past three sessions, hog contracts spiked on the open amid a spate of short covering and improving pork cutout values. Also, December and February's oversold Relative Strength Index conditions emboldened early buyers.

But again, pork futures were unable to sustain upward momentum due to willing sellers on rallies, technical resistance and lingering hog production concerns.

Additionally, packers may have sufficient on-hand inventories to accommodate this week's slaughter schedule. And, a few processors are playing it close to the vest as they conserve tightening profit margins.

Another mixed cash trade may be on tap for Wednesday, according to country hog buyers.

Also, the U.S. Department of Agriculture's weekly Iowa/Southern Minnesota average hog weight item will be available on Wednesday. Some in the pit wonder whether producers are current in their marketing practices or if hogs continue to put on the pounds.

Pork bellies ended unchanged to lower on lean hog pressure, lower midday fresh belly quotes and positioning before CME's weekly belly storage report. The data is scheduled for release Tuesday after 5 pm EDT (2100 GMT).

Source: FXSTREET.com
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