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DJ CME Livestock Review: Hogs Lose, Cattle Complex Gain

Chicago Mercantile Exchange lean hogs finished lower Monday on profit-taking, sell stops and U.S. stock market bearishness.

Chicago Mercantile Exchange lean hogs finished lower Monday on profit-taking, sell stops and U.S. stock market bearishness.

Bellies settled mixed, while live and feeder cattle finished above board.

Lean hogs spiked at first, driven by follow-through buying and Friday's persistent pork cutout climb. Sharply higher Missouri direct cash hog quotes stiffened May, which will expire on May 14.

Pork contracts, however, eased as short-term longs pocketed profits. Bullish traders were still nervous about future's premium to CME's hog index. And, June backtracked after it tested Friday's 68.65-cent top.

Although higher subsequent cash quotes at times cushioned May's fall, July encountered 20-day moving average resistance. July lost further traction after the contract filled Friday's chart gap on the way down.

Cash hog prices are seen up as much as $2 per hundredweight for Tuesday. Although some processors are operating in red ink, they are willing to do so as long as pork sales remain brisk.

Forward positioning outpaced pit-oriented Goldman roll activity. But funds may step up their roll efforts on Tuesday, on the eve of the official conclusion of the current roll period.

The Goldman roll, which officially began last Thursday, involves funds shifting some of their June long positions into July in association with the Standard & Poor's Goldman Sachs Commodity Index.

Pork bellies ended mixed.

Profit taking, sell stops and lean hog selling trimmed July. August, meanwhile, gained after it bounced off 20-day moving average support and later tripped buy stops.

CME's weekly belly storage report will be available on Tuesday after 5 p.m. EDT.

May hogs closed down 2 points at 61.10 cents a pound. June closed down 42 points at 67.77 cents. And, July ended 102 points lower at 69.75 cents.

May pork bellies, which will expire on May 26, were unquoted. July finished 95 points lower at 79.05 cents. And August closed up 15 points at 80.60 cents.

Cattle Complex

CME live cattle ended higher on fund buying, buy stops and short covering.

Profit-taking softened beef futures at first. June and August triggered a small number of sell stops after both contracts slipped beneath key technical support levels.

Also, lower U.S. equities and financial markets initially weighed on cattle contracts.

Live cattle, however, inched upward aided by front-month discounts to last week's cash cattle price sales.

To read the entire article, link to Market Watch.