Pork Futures: Hogs Fade

by 5m Editor
24 January 2008, at 9:43am

CHICAGO - CME hogs settled lower on spot February technical resistance, spreaders who sold April and bought February, and ensuing light April fund liquidation.

Pork futures started mostly firm on cash prices that were reported up as much as $2 per hundredweight that spurred short covering. Also, prospective bulls warmed to talk of cold weather in sections of the Midwest that in the short term might reduce shipments of hogs to processors.

Most traders discounted the impact of Tuesday's USDA cold storage data due to the report's dwindling importance as a major market-mover and because the data is a month removed from present-day circumstances.

However, some in the pit were still impressed with the report's December ham and total pork inventory outcomes that were below the November figures despite massive hog slaughters.

February made further headway as subsequent cash hog prices strengthened as the morning progressed. And, April jumped abruptly after it rolled through key moving average resistance levels that alerted fund buyers and tripped buy stops.

Additionally, back-month hog contracts picked up momentum even though CBOT corn foundered in negative trading areas throughout the session.

Nevertheless, February buying stalled when the contract was unable to move beyond its 20-day moving average. April ticked downward after pancaking through first 20-day, then later 10-day moving average support floors that triggered selling by funds.


5m Editor