Pork Futures: Hogs Collapse

by 5m Editor
5 March 2008, at 9:08am

CHICAGO - Chicago Mercantile Exchange hogs closed sharply lower on generally depressed live hog quotes, fund liquidation and June/July bear spreads.

Live cattle and pork bellies posted significant losses while feeder cattle ended narrowly mixed.

Pork futures came under duress at the start on the heels of Monday's pork cutout drop and Missouri direct hog's steady-to-$1 per hundredweight lower price. Back-month hogs quickly adopted a bearish attitude after Chicago Board of Trade corn futures lagged in overnight trading.

Lean hogs deteriorated after downward momentum tripped sell stops that eventually led April to a 56.70-cent fresh contract low. June fund selling kicked in after spreaders bailed out of the nearby-month option and landed in July.

Furthermore, spreaders who sometimes sold June and purchased spot-April outpaced pre-Goldman rollers.

The Goldman roll involves funds moving some of their spot-April long positions into nearby-June. The first of five days for the roll period will officially start on March 7 and is done in conjunction with the Goldman Sachs Commodity Index.


5m Editor