The Other White Meat offered a little of the green stuff to futures traders yesterday.
The CME February lean hogs contract finished at 63.35 cents per pound, 1.65 cents or 2.7% higher. Prices got a boost from the spread trade as longs in the about-to-expire December contract started to move aggressively into February late in the day. Prices were already firmed by carryover short covering, fund buying and bids in the spot market.
Weather concerns are now a feature in the market as traders eye the likelihood of another winter storm enveloping the corn belt.
Although some technical indicators have started to flash bullish signals, there is no shortage of traders who view Monday's unexpected rally as a blip in a bear market. Closes above 63.75 would renew the rally off November's low.
In line with hog prices, February bellies closed 1.15 cents higher to 92.47, extending price gains from last week's low. Closes below 88.82 would likely scuttle the rally.
CME Lean Hogs (Feb '08)