CME Pork Review: Hogs Surge To New Highs; Bellies Up 

CME Pork Review: Hogs Surge To New Highs; Bellies Up

CHICAGO (Dow Jones)--Chicago Mercantile Exchange hogs settled sharply higher Tuesday. with all trading months posting new contract highs except February. on short covering. fund buying and spreading. Pork cutouts' persistent strength. packers competing for tight supplies and light hog weights provided added lift.
CDT on Wednesday. made a new contract high of 75.35 cents a pound. July's new contract high is 73.87 cents where it briefly christened hog's newly expanded 300-points daily trading limit.
Futures trading also featured aggressive July/August bull spreading against fund factions moving some of their July long positions into August on the eve of the last official day of the Goldman Roll. The roll is done in association with the Goldman Sachs Commodity Index.
Country hog buyers predict steady to possibly higher cash bids from packers on Wednesday. although there were bearish sentiments on and off the trading floor that cash hog prices may be nearing highs for the year.
And while the June contract appears to be keeping pace with strong cash sales at Iowa/Southern Minnesota. June and July are also venturing further into bearish overbought Relative Strength Index territory.
Aside from July/August bull spreading and Goldman rolling in the opposite direction. August/October bear and December/February bull positioning were also common.
ABN Amro bought July and August outright. RJ O'Brien was an outright June and August buyer. Rosenthal bought June and July outright and was a July/August roller. Fimat. Goldman Sachs and JP Morgan sold July and bought August on the roll. Cadent Financial sold August.
Also. speculative buying driven by tight hog supplies and elbowing ahead of CME's weekly belly storage report on Tuesday after 4 p.m. CDT helped futures recover from initial declines caused by profit taking and disinterested buyers.
Analysts and floor traders estimate CME's weekly belly storage data could show that 800.000 to 1.5 million pounds of product was taken out exchange-approved warehouses last week. Last year during the same period 1.044 million pounds of bellies were removed from storage.





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