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Pork Futures: Hogs Gain Slightly

by 5m Editor
16 October 2007, at 10:59am

CHICAGO - Lean hogs closed firm on short covering and December/February bear spreads that slowed spot-December's climb but gave February an added boost. February/April bear spreads were also common during the otherwise uneventful session.

Hogs initially spiked on the open driven by a burst of short covering. Steady-to-better Missouri direct and terminal hog prices inspired potential buyers. And, December and February's oversold Relative Strength Index conditions were initial market pluses.

But, front-month buying subsided and futures drifted from early-session tops amid record hog slaughters and the notion that December futures typically do not fare well during the late winter.

"You've got more meat out there than you can shake a stick at, and Thanksgiving, Christmas and New Year's holidays tend to back animals up on farms during that period," a broker said.

Additionally, December at times floundered in negative territory, particularly after midday major direct hog market prices came in lower.

By the same token, lean hogs suffered little in terms of pressure because of the December and February's oversold situations, recent board liquidation and feelings that Friday's sell-off was overstated.

Country hog buyers anticipate steady cash hog prices for Tuesday. While some packers booked animals into the middle of the week, others are looking to secure hogs for another big Saturday kill.

Source: FXSTREET.com

5m Editor