Pork Futures: Hogs Down

KANSAS CITY - Lean hog futures closed mostly lower, with losses led by most-active February which fell 107 points on fund selling and spread trading.
calendar icon 4 December 2007
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December hogs closed off 20 points at 54.70 cents. February hit a 1 1/2-week low as it mildly challenged technical support provided by a chart gap formed on Nov. 20 then closed at 61.22 cents.

Concerns about large supplies of slaughter-ready hogs extending throughout December and into early 2008 contributed to the declines in February and most of the deferred contracts, brokers and analysts said.

Speculative and hedge selling was believed to have contributed to the declines in most of the deferred contracts. The October and December '08 contracts hit 5 1/2-week lows.

Dan Vaught, analyst with A.G. Edwards and Sons in St. Louis, said the market may be reflecting a growing recognition that the hog and pork complex could be pretty weak during the holiday season. "The February premium begins to look extremely large if you're worried about a dip to fresh lows around New Year's Day," he said.

A broker said some cash-connected accounts were buying near the lows to cover short positions following reports of firmer prices paid for hogs in some locations.

Most-active players in hogs Monday were R.J. O'Brien, which bought December while locals sold that month. Locals were buyers in February against selling by Rosenthal-Collins and Man Financial. Rosenthal bought April hogs.

Source: FXstreet.com
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