Pork Futures: Hogs Surge

by 5m Editor
29 January 2008, at 8:25am

CHICAGO - CME hogs settled higher on bullish fundamental factors, short covering and fund buying.

Pork contracts spiked at the start driven by steadily improving pork cutout prices and Missouri direct hogs that came in up as much as $3 per hundredweight. However, rear-hog months lagged somewhat due to CBOT corn's overnight slide.

Subsequently, February and April buying dried up as both contracts put further bearish distance between them and CME's hog index. And, April flopped noticeably after it drifted below 10- and 20-day moving average support.

What's more, some in the pit were leery about pushing February up even more given tighter packer margins that may later limit what processors will pay for supplies.

Nonetheless, front-month hogs snapped back after February bounced off 20-day moving average support and most direct hog markets were quoted higher as the day progressed. Also, April made significant headway after returning above the 10- and 20-day moving average areas, which enticed funds.

Cash gains are expected to linger into Tuesday.

However, pit bulls are nervous about whether futures' rally Monday was "too much, too soon" and may be due for a downward adjustment.


5m Editor