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Pork Futures: Hogs Lower

by 5m Editor
21 June 2007, at 8:49am

CHICAGO - Lean hogs finished lower amid speculation that this week's cash hog pricesmay be close to topping out given unsatisfactory profit margins and plentifulmeat and live supplies.

Fund selling was also common particularly in the October contract. Octoberalso suffered under the weight of bull-spreading into July and August out ofOctober through 2008 February trading months. That cushioned front-month lossesbut exerted added back-month pressure.

Hogs traders chose to ignore solid near-term fundamentals including Tuesday's$1.15 pork cutout jump and cash prices on Wednesday that were up more than $3per hundredweight in some areas.

However, packers operating in the red caused some in the pit to wonder muchlonger processors would continue to pay up for supplies at the detriment oftheir bottom lines.

Furthermore, there is growing anxiety among bullish hog traders thatregardless of lighter-weight hogs, daily kills inching towards 390,000 headmight result in diminished wholesale demand for product at current prices.

July hogs ended par with the 74.72-cent 40-day moving average and under74.77-cent 20-day moving average resistance.

August finished below the 74.13-cent 40-day and 74.21-cent 20-day movingaverage resistance levels.

Source: FXSTREET.com

5m Editor