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Pork Futures: Most Hogs Gain On Spreads, Roll, Spec Buys

by 5m Editor
14 March 2007, at 1:10am

CHICAGO - Chicago Mercantile Exchange hogs settled mostly firm Tuesday on April/June bull spreading against the move by April fund longs into June on the final day of the Goldman Roll that is tied to the Goldman Sachs Commodity Index.

Meanwhile, short covering and light back-month speculative hedging landed some contracts in positive trading territory despite depressed Chicago Board of Trade corn futures and June's bearish premium to CME's hog index.

Spot April closed 50 points lower at 67.45 cents a pound and near a session low. Actively traded June closed 52 points higher at 78.00 cents and in the upper half of the trading range. Both contracts settled within Monday's highs and lows.

Pork futures traded erratically after the opening bell amid conflicting fundamentals including Monday's $0.16 pork cutout dip versus steady to $1.00 per hundredweight higher Missouri direct and terminal hog prices.

Mixed subsequent cash trading at major direct hog markets offered no discernible direction for fundamental followers who observed the choppy market from afar to avoid remnants of the Goldman Roll.

Floor traders discounted Monday's significant slaughter drop that was attributed to a processing plant offline because of mechanical issues. The packing facility was operational Tuesday.

Uncertainty about overall packer needs and another pork plant breakdown Tuesday generated caution regarding Wednesday's cash bids.

Source: FXSTREET.com

5m Editor