Pork Futures: Hogs Uneven

CHICAGO - CME hogs closed mixed in a two-tiered trade that saw December through April fall to contract lows while speculative buyers supported remaining contracts.
calendar icon 31 October 2007
clock icon 2 minute read

Front-month negativity was stirred by depressed cash hog quotes and February/April bear spreads. Commercial and local selling contributed to December's and February's losses.

Steady to weak Missouri direct and terminal hog market prices caused potential board buyers to recoil on the open. Prospective bulls were also put off by Monday's pork cutout drop and fading calculated packer profit margins.

February was the target of liquidators due to the contract's premium to spot December and compared with CME's hog index. And, subsequent midday direct cash hog pressure sank December and February further into negative trading territory.

Probing market
Nonetheless, break buyers probed for a market bottom driven by December's and February's oversold chart indicators. Also, potential longs were lured to December's discount to CME's two-day hog barometer.

Front months mounted a late day offensive that was beaten back by aggressive selling into the closing bell.

Country hog buyers anticipate steady to weak cash hog bids for Wednesday. However, floor sentiments are for a mixed mid-week cash trade depending on packer needs for Saturday's slaughter.

Midday pork cutout values continued to suffer under the weight of hefty hog kills. The same is expected for the federal government's evening pork cutout wire that could also eat away at already tightening estimated packer profit returns.

Source: FXSTREET.com
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