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Pork Futures: Lean Hogs Settled Weak

by 5m Editor
22 May 2007, at 9:05am

CHICAGO - Lean hogs settled weak on chart-based selling and June/July and July/August bear spreading against June/October bull positioning as long and short position holders disagreed about cash direction heading into the Memorial Day holiday.

Citing Monday's surprising cash hikes, bullish market participants assert that tight supplies due to lighter hog weights will put a floor beneath cash bids through the holiday. On the other hand, their bearish counterparts argue that packer and retail meat buyers will purchase supplies only as needed.

Despite cash bids' jump of more than $3 per hundredweight in some parts of the Midwest, a handful of June traders sold the spot-month based on an agricultural firm's May 19 sell recommendation, which was Saturday. Most traders either ignored the firm's suggestion to work June/August bear spreads or implemented the trade last Friday, a hog broker said.

Only a handful of hog-market participants positioned themselves ahead of the federal government's monthly cold storage report on Monday at 3 p.m. (1900 GMT) because it is generally regarded as more of a belly-oriented survey.

Country hog buyers anticipate cash gains extending into Tuesday. Nonetheless, even some die-hard pit bulls are nervous about packers' ability to continue to hike cash bids in the face of tightening calculated profit margins.

Source: FXSTREET.com

5m Editor