Pork Futures: Hogs Flat-Soft
CHICAGO - CME hogs closed flat to weak on spot-December elbowing in advance of the contract's Friday expiration, February's bearish premium to CME's hog index and February/April forward positioning.Spread positioning sometimes minimized February's losses and pressured April during the otherwise lacklustre session.
Lean hogs churned throughout the morning as December negotiated within a tight trading space based on speculation about where the contract would expire. February was buffeted by its bearish premiums to CME's hog index versus underlying technical and psychological support.
Fundamental factors were largely ignored because of December's pending board exit and February's disconnect to near-term cash hog prices and pork cutout influence.
"It was a nothing day highlighted by locals who took shots at breaks and rallies," a trader said.
Nonetheless, terminal hog prices were quoted mixed while midday direct cash hog values were mostly weaker. Country hog buyers foresee generally steady cash bids for Friday as processors prepare for Saturday's slaughter.
However, there are sentiments that cash hog prices could take a turn for the worse next week due to tightening calculated packer profit margins. Also, futures may look ahead to processors winding down ahead of the Christmas holiday the following week.
Furthermore, bearish traders are looking for February futures, which is already at a negative premium to the exchange's hog index, to grind lower heading into and possibly soon after December's expiration.