Pork Futures: Most Hogs Sag
CHICAGO - Chicago Mercantile Exchange hogs closed mostly weak on cash hogs' continued downward spiral and December/February forward spreaders who later gave ground to longs' movement out of December into February in preparation for Wednesday's Goldman roll.
6 November 2007
2 minute read
Pork futures dropped on the open on fading pork cutout prices and $1 to $4 per hundredweight lower terminal and Missouri direct hog returns. Also, initial buying was spotty at best as prospective bulls stepped back at the start to feel out market direction.
At times, December and February's oversold technical indicators, and the spot month's discount to CME's hog index, motivated speculative buyers to take stabs at trying to find a market bottom. What's more, some saw front months' spill to new contract lows on Monday and early Tuesday as buying opportunities.
Nonetheless, pork futures' upward momentum stalled amid persistent midday direct hog market declines. Also, there is concern that already sluggish wholesale pork demand could slow even more as Thanksgiving Day holiday buying by grocers subsides.
Country hog buyers anticipate more cash weakness for Tuesday.
Friday's pork cutout rebound was considered a positive downside market influence on Monday. However, rather than count on Friday's snap back as a sign that pork cutout values are on the mend, bullish traders want to see if a trend develops.
While improving estimated packer profit margins might encourage some packers to post steady money for supplies Tuesday, others who have on-hand inventories well in hand may pressure bids at least into the middle of the week.
At times, December and February's oversold technical indicators, and the spot month's discount to CME's hog index, motivated speculative buyers to take stabs at trying to find a market bottom. What's more, some saw front months' spill to new contract lows on Monday and early Tuesday as buying opportunities.
Nonetheless, pork futures' upward momentum stalled amid persistent midday direct hog market declines. Also, there is concern that already sluggish wholesale pork demand could slow even more as Thanksgiving Day holiday buying by grocers subsides.
Country hog buyers anticipate more cash weakness for Tuesday.
Friday's pork cutout rebound was considered a positive downside market influence on Monday. However, rather than count on Friday's snap back as a sign that pork cutout values are on the mend, bullish traders want to see if a trend develops.
While improving estimated packer profit margins might encourage some packers to post steady money for supplies Tuesday, others who have on-hand inventories well in hand may pressure bids at least into the middle of the week.
Source: FXstreet.com
