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The "Goldman roll" involves funds moving some of their spot-December long positions into nearby-February. The first of five days for the roll period will officially begin on Nov. 6 and is tied to the S&P's GSCI.
February pork bellies, the only contract that traded, ended limit down. Live cattle finished narrowly mixed. And, feeder cattle closed moderately higher.
Lean hogs spiked at first on short-covering and late-Wednesday's modest pork cutout rise.
However, spot-December and nearby-February premiums to CME's hog index and both months' overbought chart conditions spawned selling into upticks. Front-month selling accelerated after the contract slipped beneath recent lows.
And, bullish traders gravitated toward the pit's outskirts as cash hog quotes later faded. Also, Thursday afternoon's ham price drop raised fear that the pork cutout price may suffer prior to the Thanksgiving Day holiday.
Meanwhile, distant hog month buyers were on the fence because of the steady U.S. dollar and Chicago Board of Trade corn's subsequent downturn.
Mostly steady cash hog bids are expected for Friday as processors string together hogs to satisfy Saturday's estimated 145,000 to 150,000-head kill.
Some processors will likely buy hogs for early next week while at least three pork plants are scheduled to be dark next Wednesday in observance of the Veterans Day holiday.
Market participants will likely square positions on Friday, which is the formal start of the November "Goldman roll" phase.
December hogs ended 120 points lower at 56.60 cents a pound, and February finished 85 points lower at 63.47 cents.
February pork bellies closed down the 300-point daily price limit at 84.80 cents on leftover selling after futures' tumble Wednesday, sell stops and lean hogs' slide.
February bellies also fell through the 20-day moving average support floor.
Other belly months were unquoted.
Cattle Complex
CME live cattle closed narrowly mixed on December/February bull spreads driven by Thursday's cash cattle prices. Traders bought April and sold February on spreads. Also, U.S. equities' steep climb later landed back-month cattle on the plus-side of the ledger.
Live cattle fluctuated throughout the morning. December and February traded on either side of their 10-day moving average, which tripped sell stops as well as buy stops.
And while far cattle month speculative buyers at times zeroed in on U.S. equities' steady rise from morning lows, those who planned to sell far cattle contracts looked no further than low-priced CBOT corn.
However, it was $86 to $87.50 per hundredweight cash-basis cattle Thursday that seemed to appease bullish and bearish traders alike.
Futures were at bullish discounts to cash results while at the same time fed cattle prices tapered off as the week progressed, a brokerage firm's cattle futures trader said.
Fed cattle earlier in the week sold for $87 to $88. And, cash cattle a week ago bought mostly $87.
Market participants on Friday will settle their business affairs before the weekend and make way for the onset of the "Goldman roll."
December live cattle closed up 10 points at 86.35 cents a pound, and February finished down 15 points at 87.22 cents.
Feeder cattle closed moderately higher on residual buying following futures' run up Wednesday, buy stops and spreading into March out of forward contracts.
November feeder cattle ended up 22 points at 95.60 cents, and January closed up 47 points at 97.17 cents.
-By Theopolis Waters, Dow Jones Newswires; 312-559-4965; theopolis.waters@dowjones.com
(END) Dow Jones Newswires
11-05-09 1557ET
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