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Pork Futures: Hogs Lower

by 5m Editor
28 November 2007, at 9:17am

KANSAS CITY - Lean hog futures closed mostly lower with nearby December declining the most as it was pressured due to its wide premium to current cash prices.

Brokers said some traders are disappointed by this week's cash trade that so far has been mostly steady. Prices were expected to move up this week following the US Thanksgiving holiday.

"If cash isn't going up, then futures - especially the front month (December) - has to come down to take out part of its big premium," a broker/analyst said. "Time is running out on the December bulls because there is only 2 1/2 weeks left before it expires."

Brokers and analysts said hedging and speculative selling occurred in the back months. The December '08 contract fell nearly as much as the nearby December contract as it closed 102 points lower, but it is carrying a premium of 12.15 cents to the December '07 contract.

Local traders were buyers in December hogs after midday while R.J. O'Brien sold that month. In February hogs, Rosenthal-Collins bought and locals sold.

Belly futures opened higher with February surging 222 points on the initial bell but could not hold the gains amid spill-over pressure from the lean hog pit and concerns of large hog supplies available for the foreseeable future.

February closed down 35 points at 91.62 cents and completed a bearish outside reversal on western charts. March bellies closed 50 points lower at 91.00 cents.

Source: FXstreet.com

5m Editor