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Pork Futures: Hogs Mixed

CHICAGO - Chicago Mercantile Exchange lean hogs closed mixed on futures' premiums to CME's hog index and December/February bear and February/April forward spreads. Spread positioning pressured December, lifted February and capped April's advances.
calendar icon 7 December 2007
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Pork bellies settled narrowly mixed. Live and feeder cattle contracts closed moderately firm.

CME hogs slipped at the start after short-term bulls claimed profits after Wednesday's surprising rally. Pork cutout's lapse Wednesday, and December and February's premiums to CME's hog index, added to the market's bearish tone despite steady-to-better cash hog price quotes.

Furthermore, spot-December liquidation, either outright or through spreads, continued ahead of the contracts scheduled Dec. 14 expiration date.

Nevertheless, short covering and modest midday direct hog price gains gradually lifted pork futures from morning lows. Also, forecasts for another bout of wintry weather in the Midwest by late Thursday minimized December and February losses.

Country hog buyers predict mostly steady packer bids for Friday. That, a broker said, could vary depending on the severity of the upcoming storm and packer needs for Saturday's kill that could top 250,000 head.

Traders Friday will be mindful of wholesale pork demand following this week's inconsistent prices. What's more, grocers may book only small amounts of pork as the Christmas holiday nears.

Source: FXstreet.com