Pork Futures: Hogs, Bellies Surge

KANSAS CITY - Chicago Mercantile Exchange lean hog and belly futures closed sharply higher Friday, with the nearby months in both pits leading the gains.
calendar icon 10 November 2007
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Meanwhile, live cattle were mixed and feeders ended modestly higher.

Short covering and technical buying pushed lean hogs up in a bullish correction after an eight-week slide resulted in new contract lows earlier in the week. Also, the nearby contracts had become extremely oversold. The Relative Strength Index in December hogs at the start of Friday's session was at 16% and in February was just 9%.

The rally put December hogs at a 1 1/2-week high and February at nearly a two-week top while the deferred months posted from 2 1/2- to four-week highs.

December hogs closed at 53.90 cents, up 242 points, or 4.7%. February finished at 61.45 cents, up 292 points, or 5.0%.

Brokers and analysts said buy stops, or previously placed buy orders, were tripped when lean hog futures climbed through key chart resistance points to the multi-week highs. Fund buying also helped lift the deferred contracts.

Source: FXSTREET.com
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