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Pork Futures: Hogs Gain Sharply

by 5m Editor
13 July 2007, at 8:17am

CHICAGO - With the exception of spot-July Chicago Mercantile Exchange lean hogs, which lagged as the contract's July 16 expiration date approaches, other hog months finished sharply higher Thursday, and August closed limit up on fund buying, buy stops and August/October bull spreads.

Pork bellies also ended sharply higher with July and August limit up.

Meanwhile, live and feeder cattle contracts settled in negative trading territory on the day.

Spot-July hogs were pressured by mostly lower cash hog quotes and tethered toideas about where the contract would settle when it exits board trading Monday.

However, remaining contracts wasted little time posting substantial gains. Initial board advances were ignited by talk that processors may be motivated to raise cash hog bids next week due to encroaching heat in the Midwest and much-improved calculated packer profit margins.

August's oversold Relative Strength Index condition and Chicago Board of Trade corn's gradual move up as the morning wore on also encouraged hog buyers.

Furthermore, word that China may be interested in buying US pork because of animal disease issues, produced a noticeably bullish CME hog response. Funds joined the buying binge after August and October plowed through prime technical resistance obstacles and tripped buy stops that on point helped elevate August through December to limit-up status.

August's locked-limit settlement delayed the movement of August longs into October Friday, the final day of the Goldman roll that is tied to the Goldman Sachs Commodity index.

Source: FXSTREET.com

5m Editor