Chicago Mercantile Exchange Lean Hog Futures Close Mostly Firm Despite Volatility
Chicago Mercantile Exchange (CME) lean hog futures closed mostly firm on February 6, 2006, as traders engaged in spreading and short covering amidst volatile trading. The February and April contracts showed notable improvements in their Relative Strength Index (RSI) signals, suggesting potential buying opportunities. Despite this, the February contract ended below its trading range, while the April contract closed above its trading range. Pork futures, however, opened lower due to trailing pork cutout values and fund selling.
Key Takeaways:
- The CME lean hog futures market experienced mostly firm trading on February 6, 2006, with February and April contracts showing oversold RSI signals.
- Spreading was a significant feature of the trading session, with traders engaging in February/April and February/June bear spreads, as well as April/June bull spreads.
- Estimated hog volume reached 16,159 contracts, compared to 19,390 contracts on Friday, indicating a decrease in trading activity.
- Pork futures traded lower, with all contracts making new contract lows due to deliverable belly supply worries, cash pessimism, and skittish buyers.
- Late-day modest advances in hog prices facilitated short covering and speculative purchases, lifting contracts from session lows.
- February hog futures closed 37 points lower at 75.62 cents a pound, while March hog futures closed 37 points lower at 75.25 cents a pound.
Statistics:
- Estimated hog volume: 16,159 contracts
- Estimated pork belly futures volume: 469 contracts
- February hog futures close: 75.62 cents a pound (37 points lower)
- March hog futures close: 75.25 cents a pound (37 points lower)
Sources:
- Dow Jones Commodities News via Comtex (Jan 30, 2006 1453ET)
- Dow Jones Newswires; 312-715-6279; theopolis.waters@dowjones.com (END)
- Dow Jones & Company, Inc. (2006)