CHICAGO (Dow Jones)–Profit-taking after Chicago Mercantile Exchange hogs’
run up Wednesday is seen pressuring some contracts Thursday.
Also, bullish traders may take a step back at first because of uncertainty
about whether futures have topped out seasonally or put in a near-term bottom
after June and July slid from April 23 contract highs of 87.80 and 87.95 cents,
respectively.
However, Wednesday’s $0.59 per hundredweight wholesale pork price increase
that boosted pork packer profit margins is a supportive market influence.
Steady rather than lower cash hog price calls for Thursday suggests packers are
willing to lay a foundation underneath cash hog bids because of resurgent
wholesale pork sales.
Furthermore, May through July lean hogs are still undervalued based on CME’s
lean hog index, which is another positive futures factors.
Spot-May traders will also track the exchange’s hog index heading into
spot-month expiration on May 14.
Thursday is the last official day for the current Goldman roll period. The
process, which is associated with the Standard & Poor’s Goldman Sachs Commodity
index, consists of funds shifting some of their June long positions into July
and August.