Pork Futures: Most Hogs Gain

CHICAGO - CME hogs ended mostly firm on short covering tied to pre-weekend position squaring. December/February forward spreaders took on Goldman roll factions. And deep-month speculative buyers were motivated by higher CBOT corn contracts.
calendar icon 3 November 2007
clock icon 2 minute read

Pork futures churned after the opening bell on warmed-over selling after Thursday's steep drop and cash pessimism that clashed with December's discount to CME's hog index and front-months' deeply oversold technical indicators.

Lean hogs ticked upward as shorts claimed profits before the weekend. By the same token, December buying at times sputtered as cash hog quotes came in weaker as the morning progressed.

Nevertheless, aggressive unwinding of Thursday's December/February bear spreads underpinned the spot month but pressured nearby February. It was first thought February would garner most of the support due to pre-Goldman roll business.

Country hog buyers anticipate steady to weak cash hog bids for Monday.

Market participants will monitor pork cutout prices to see if an uptrend develops after Thursday's modest snap back. Hog market bears believe Friday's board advances amounted to a short covering respite and, they argue, more fundamental bearishness looms on the horizon.

Meanwhile, outright hog futures buyers remain glued to the sidelines to avoid getting chopped up by funds who will move more of their December positions into February as the Goldman roll date nears.

On the other hand, December and February's oversold chart barometers will continue to motivate speculators in search for a market bottom.

Source: FXSTREET.com
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