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Pork Futures: Hogs Lose Ground

by 5m Editor
25 July 2007, at 9:01am

CHICAGO - Despite generally supportive fundamentals, ChicagoMercantile Exchange hogs closed lower on fund liquidation, sell stops andearly-session profit taking. Pork bellies finished mostly firm.

Meanwhile, live cattle gained on the day while feeder cattle ended weaker.

Lean hogs spiked on the open driven by follow-through buying and Missouridirect cash hog prices that came in up $1.50 per hundredweight. However, theboard rally fizzled as buying interest splintered and profiteers stepped inafter December again posted a new contract high.

Hog future's subsequent downward spiral caught the eye of funds, especiallyafter August drifted below initial 100-day moving average support. That, alongwith August and December's premiums to CME's cash index, hastened declines thattripped sell stops along the way.

Although cash hog prices were reported mostly higher, pockets of weaknessstirred floor ideas that processors may soon bridle cash bids after calculatedpacker profit margin's abrupt fall on Monday. Packer-buyer hog calls forsteady, rather than higher, cash prices for Wednesday reinforced thosesentiments.

Source: FXSTREET.com

5m Editor