CME update: hog futures close slightly lower on bargain-buying
US lean hog futures traded mostly higher on 11 January on bargain-buying and short covering, but the nearby February contract posted losses and funds rolled their long positions to deferred months.
12 January 2021
3 minute read
By: Reuters reports that position roll by funds, as they closed out long positions in the spot month and bought deferred contracts on the second day of the five-session “Goldman roll” period, continued to weigh on front-month futures.
February lean hogs fell 0.225 cent to 68.475 cents per pound, while deferred contracts were down 0.025 to up 0.500 cent.
"It seems like with the amount of marketings that we're seeing, the trade is nervous about that. That's overhanging the market fundamentally," said Mike Zuzolo, president of Global Commodity Analytics.
"It was pretty easy for the funds and some of the longs to take profit once some sell-stops were hit underneath the recent lows," Zuzolo said.
Lingering concerns about weaker pork demand as coronavirus restrictions have shuttered many restaurants also weighed on prices.
Elevated feed costs, with corn hovering near 6½-year highs, is also a concern.
