Chicago Mercantile Exchange Lean Hog Futures Rally Amid Technical Buying and Roll Activity

Strategic Insights -

The Chicago Mercantile Exchange (CME) lean hog futures saw a significant rally in Monday's session, driven by technical buying and the upcoming roll activity. The 2009 contracts showed strong gains, although the 2010 months started off lower. Analysts pointed to some follow-through buying from the previous Thursday's gains, with traders positioning themselves before the official start of the Goldman roll on Wednesday.

Key Takeaways:

  • The CME lean hog futures rallied from mixed to mostly higher in Monday's session, with the 2009 contracts showing significant gains.
  • Technical buying played a crucial role in the rally, with some traders positioning themselves before the official start of the Goldman roll on Wednesday.
  • August hog futures hit a one-month top at 62.70 cents a pound and closed at 62.05, up 90 points.
  • July and most-active August hog futures were each up 135 points to close at 55.20 cents and 55.52 cents, respectively.
  • The fact that live cattle markets didn't respond well to lower grain markets was considered bearish to live cattle.
  • Chicago Mercantile Exchange live cattle futures ended mostly lower amid hedge selling, general nervousness about the market getting too far ahead of the cash market, and pressure from outside markets like crude oil and the stock market.
  • Feeder cattle ended higher, gaining support from lower grain markets and pressure in nearby cattle contracts linked to the cash market.

Statistics:

  • July hogs hit a two-week high earlier in the session at 61.60 cents a pound but gave back nearly 100 points of the gain to close up 67 points at 60.65 cents.
  • August hog futures closed at 62.05, up 90 points.
  • July and most-active August hog futures closed at 55.20 and 55.52 cents, respectively, up 135 points each.

Sources:

  • Dow Jones Commodities News via Comtex, Jul 06, 2009
  • Dow Jones Newswires, 913-322-5179; lester.aldrich@dowjones.com
  • SmarTrend Alert, an automated pattern recognition system, indicated an UPTREND on 12-09-2008 for CME @ $227.04 (Comtex News Network, Inc., 2004-2009).