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Pork Futures: Hogs Slide

by 5m Editor
24 October 2007, at 8:28am

CHICAGO - CME hogs closed lower on depressed cash quotes, local selling and sell stops. December/February bear spreads and CBOT corn's misstep exacerbated lean hog declines.

Pork contracts spiked on the open on short covering, but the rally again faded after buying dried up and selling into upswings occurred - which has now become a recent familiar pattern.

"Every time we try to get this thing moving up, somebody comes in and pounds the heck out of them," a trader said. "That's been going for more than a week, and I don't see the trend breaking until we get something to hang our hats on."

The weight of highly watched midday direct hog market quotes that came in down more than $1 per hundredweight caused a noticeably bearish spot-December reaction. February, a trader said, went along for the ride.

Country hog buyers anticipate additional cash declines for Wednesday amid talk that some processors have enough supplies booked through the rest of the week.

The stress of fundamental bearishness pulled some trading months to within a few points of their previous contract lows. That, along with record hog kills, could spell more board losses for Wednesday, a broker said.

RJ O'Brien was on both sides of December. Locals sold December and February. Rosenthal sold December and bought February on spreads.

Pork bellies ended sharply lower on lean hog's retreat, Monday's bearish U.S. Department of Agriculture monthly cold storage results and positioning ahead of CME's weekly belly storage figures. The exchange's belly storage data will be released Tuesday after 5 p.m. EDT.

Source: FXSTREET.com

5m Editor