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Pork Futures: Hogs End Mostly Firm

by 5m Editor
6 June 2007, at 8:36am

CHICAGO - Lean hogs closed mostly firm on short covering, generally steady-to-higher cash hog quotes and Monday's reduced hog slaughter.

Meanwhile, "butterfly" spreads, which consisted of selling June and August as the butterfly's wings and buying July that symbolized the body of the butterfly, provided added August support.

Pork contracts chopped around during most of the session as break-buyers were inspired by Monday's hog kill that ducked below 400,000 head for the first time in about a week. Hog market longs were also encouraged by June and July's close proximity to CME's hog index.

Nevertheless, July's overbought chart condition, technical resistance and packers operating with unsatisfactory profit margins sparked periodic selling into upswings.

Country hog buyers anticipate steady to firm cash hog prices on Wednesday as the industry gears up for the first full week of kills after last week's holiday-shortened workweek.

What's more, traders will track pork cutouts after hog kills on Monday and Tuesday came in below 400,000 head. That rekindled talk that retail meat buyers might stock up on product at current prices to avoid paying more for pork later if daily kills stay under 400,000 the rest of the week.

Source: FXSTREET.com

5m Editor