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Pork Futures: Hogs Mixed

by 5m Editor
10 October 2007, at 12:00pm

CHICAGO - Lean hogs closed mostly weak on spot October liquidation before the contract's Oct. 12 expiration, deteriorating cash hog prices, and October/December bear and December/February forward spreads. That leaned on October, limited February's gains and pushed up December.

Pork futures wilted on the open amid follow-through selling, buyer apathy and lack of market clarity. Generally steady to weak cash hog prices and skimpy estimated packer profit returns contributed to early session heaviness.

Nonetheless, October and December gradually rose from opening lows, aided by fund buying and short covering. Also, October's and December's oversold chart situations enticed speculative shoppers.

Nearby December traded above board throughout the morning. However, October floundered as cash hog prices at major direct hog margins came in lower and triggered additional October/December bear spreading.

Country hog buyers anticipated steady to possibly weak packer bids for supplies on Wednesday.

While pork cutouts were up slightly on Monday, some believe that will not be the case in the days ahead because of still monstrous hog numbers.

Estimated packer margins are in the black but not enough to motivate processors to aggressively push for hogs, a trader said. And, he said, most packers are thought to have animals booked into the weekend.

Source: FXSTREET.com

5m Editor