An early Friday rally in the hog market quickly fizzled and fund liquidation kept futures lower into the close, giving back all of Thursday’s gains. The lean hog index on the other hand was up $.25 at $75.63, but projected $.25 lower for Monday.
The Commitment of Traders Report confirmed large fund liquidation in the hog market through Tuesday’s big break. Funds liquidated just over 13,000 contracts through the week, cutting their net long position to just over 39,000 contracts or the smallest since last May. Hedgers used the break at the CME to cover close to 11,000 contracts of their net short position. Technically, the hog charts are very oversold; though, the next nearest chart support levels are still several dollars lower.