Pork Futures: Pork Mostly Weak

by 5m Editor
11 April 2008, at 8:18am

KANSAS CITY - Lean hog futures closed mostly lower, with April through October down while deep deferred December and February '09 rallied to finish modestly higher.

The summer and early autumn contracts fell rather sharply near the middle of the session on the wide premiums to current cash prices held by those contracts, analysts and brokers said. Technical factors such as broken moving average support and losses that slipped into the chart gaps on some contracts also contributed to the declines.

A broker said uncertainty about the near-term direction in wholesale pork prices also left some traders cautious about buying at that time.

After one-week lows were hit, selling interest slowed, and some traders, said to be mainly locals, began buying. Some of the buying was said to be short covering.

A broker/analyst said with the premiums carried by futures to current cash prices and April hogs scheduled to expire on Monday, there could be additional pressure on May and June hogs into next week. However, the direction that cash hog and wholesale pork prices take from here could affect the next two trading months into and past April's expiration.

Rich Nelson, analyst with Allendale Inc. in McHenry, Ill. said the gains that were posted in lean hogs last week through Wednesday occurred without any significant new developments, and the trading volume during the rally was not all that big. It appeared that there was not enough bullish news available this session to keep the rally going, he said.


5m Editor