Most hog contracts ended moderately higher last week on short covering and position squaring. What's more, some trading months benefited from spreading out of October into rear contracts.
Pork futures stumbled on the open after prospective buyers stepped back in response to Thursday's pork cutout drop after two straight days of gains. And, packer margins slumped after a recent period of slow recovery.
Market bulls were impressed with the possibility that packers might keep a floor beneath cash hog bids as they prepared for an anticipated monstrous Saturday kill. More significant though was the fact that this weekend's hog slaughter would contribute to what could be the biggest weekly hog kill on record.
Nevertheless, the lure of October's and December's oversold Relative Strength Index conditions were too much for some in the pit to pass up as they continued to feel for a market bottom. By the same token, bullish traders were not as aggressive as they would have been due to the USDA’s plentiful pig crop report late last month.
Country hog buyers foresee packers testing the waters with steady money on Monday. However, floor consensus is that with hog kill rates averaging about 420,000 per day, packers may be more inclined to lower bids than to raise them.
What's more, retailers have shied away from booking large amounts of pork in advance because of abundant fresh meat supplies.
Spot October liquidation may again become an issue on Monday as the contract prepares for its Oct. 12 expiration date. October ended under the 59.25-cent 10-day moving average.