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Pork Futures: Lean Hogs Closed Lower

by 5m Editor
23 May 2007, at 8:49am

CHICAGO - Lean hogs closed lower on fund and commercial selling, loss of front-month technical support, and midday cash hog price erosion. While bear spreading out of June into back months further weighed on the spot contract, triple-digit CBOT corn losses deterred far-month hog buyers.

Pork contracts again dipped at the start as potential buyers clung to the sidelines in the hope of receiving positive cash news because of lighter hog weights. However, recent ramped-up hog kills and tight packer margins were ominous signs of a potential cash rollback.

Initial steady Missouri direct and terminal hog quotes later turned lower amid hints that producers might be trucking hogs ahead to avoid possible lower cash bids. Additionally, packers are reluctant to pay up for animals because retail meat buying has slowed before the holiday, a broker said.

Country hog buyers and floor sources suspect that processors will keep a tight lid on cash the rest of the week. Nevertheless, market bulls are optimistic that cash and futures will bounce back early next week as packers prepare for what is expected to be a huge slaughter the weekend after the holiday.

Source: FXSTREET.com

5m Editor