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Pork Futures: Hogs Lag

by 5m Editor
8 January 2008, at 9:09am

CHICAGO - CME hogs ended moderately lower, with February through July drifting to fresh monthly lows, on deteriorating cash hog values, bear spreads and pre-Goldman roll maneuvering.

Lean hogs followed the path of least resistance after buyers stepped back on the open to gauge market direction and Missouri direct cash hog prices came in down $1 to $2 per hundredweight. Also, February and April's bearish premiums to CME's hog index sidelined prospective bullish traders.

Spot-February came under added stress from terminal market hog quotes that were reported as much as $3 lower. And, depressed midday direct hog returns further confirmed speculation that packers have supplies well in hand at least through the middle of the week.

However, the search for a market bottom is expected to continue on Tuesday given February and April's oversold chart situations. Also, despite talk that packers are not hurting for supplies, perma-bulls argue that cash hog prices should bottom out soon.

More rolling of February long fund positions into April is on tap for Tuesday, the official Goldman roll kickoff.

Pork bellies finished steady to weak. February's oversold chart condition lured speculative buyers while back months were pressured by lean hog's retreat and technical resistance.

Source: FXstreet.com

5m Editor