ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Pork Futures: Hogs Close Mixed

by 5m Editor
8 May 2008, at 7:13am

CHICAGO - Live cattle finished mixed, pork bellies closed higher and feeder cattle ended generally firm.

Chicago Mercantile Exchange lean hogs closed mixed Wednesday on cash hog price gains that sparked short covering and forward spreading that overturned the shift by longs out of June into July and August, according to FXStreet.

Lean hogs spiked on the open driven by bullish fundamentals, but futures soon retreated due to profit taking. Also, June's slight premium to CME's hog index and initial Goldman roll action contributed to front-month declines.

Wednesday was the official kickoff of the Goldman roll period that will conclude on May 13. The process involves funds moving some of their spot-June long positions into July and August in association with the S&P's GSCI.

Spot-June and July's losses mounted after both contracts dropped below key initial moving-average support levels which triggered fund liquidation and sell stops. Downward momentum also filled July's recent chart gap.

Meanwhile, nervousness about board premiums at first pressured back-month hog contracts. However, distant hog month options later rallied after Chicago Board of Trade corn gained additional ground as the session progressed.

Furthermore, June through August lean hogs perked up on higher midday direct cash hog quotes. Also, June and July bounced off subsequent technical support floors.

However, when the dust finally settled after Wednesday's choppy session, some traders on the floor shook their heads in amazement that those who conducted June/July bull spreads were able to out-muscle Goldman rollers.

View the FXSTREET story by clicking here.

5m Editor