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Pork Futures - Hogs Settle Uneven

by 5m Editor
24 March 2008, at 7:56am

US - Spot-April through July CME lean hogs ended higher on short covering, fund buying and forward spreading. Other hog contracts finished lower due to eroding CBOT corn futures.

Pork futures traded mostly weak at the start amid pressure exerted by pork cutout's continued fade and Missouri direct hog's steady to $2 per hundredweight lower quote. Also, June's bearish premium to CME's hog index was at first hard for some in the pit to swallow.

But speculative longs entered the market after spot-April posted a fresh contract low at 54.50 cents a pound. April's later upswing caught the attention of a couple of funds, tripped buy stops and forced shorts to cover positions.

Subsequent mostly steady to weak cash hog prices were encouraging for bullish traders who focused more on the mostly steady cash returns and what that might mean for live hog returns next week.

And June's premium to CME's hog barometer became less of an issue for some who believe the index has plenty of room to grow prior to June's expiration that is nearly three months away.

Country hog buyers anticipate mostly steady cash bids for Friday and possibly flat hog bids next week.

Hog market pit-bulls contend packers may raise cash bids next week after retailers evaluate post-Easter meat cases and warmer temperatures in parts of the country inspire cooking outdoors.

Also by Monday, pork market participants would have had more-than-enough time to mull over Thursday's 3 p.m. EDT USDA cold storage numbers.

Pork bellies closed higher on short covering, May's oversold technical situation and speculative hedging. Buyers also bought May and July after both contracts neared Wednesday's seasonal lows.

April lean hogs closed 137 points higher at 56.32 cents a pound, and June ended 95 points higher at 72.07 cents.

March pork bellies were unquoted. May closed 130 points higher at 75.85 cents, and July ended 110 points higher at 76.65 cents.

Source: FXSTREET

5m Editor