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Analysts and brokers anticipate a mixed Chicago Mercantile Exchange hogs open Friday on position squaring before the weekend and onset of the "Goldman roll."
The "Goldman roll" involves funds shifting some of their spot-December long positions into nearby-February. The first of five days for the roll officially begins Friday and is tied to the S&P's GSCI.
Meanwhile, bearish market factors include potential follow-through selling from Thursday's futures fall and spot-December and nearby-February premiums to CME's hog index.
Front-month hogs are also overbought based on their Relative Strength Index conditions.
And there is concern that pork cutout values could deteriorate if retail buyers begin purchasing fresh meat on an as-needed basis in advance of the Thanksgiving Day holiday.
By the same token, Thursday evening's $0.32 per hundredweight pork cutout price increase which continues to buttress pork packer profit margins is a bullish market influence.
The Dow Jones pork packer margin index for Thursday's operations was plus $5.62, compared with plus $3.18 the previous day.
And steady-to-firm cash hog price calls along with continued expectations for tighter near-term hog supplies moving forward may motivate bullish speculators.
December's 56.37-cents Oct. 30 low serves as a price support area. The contract has a chart gap between the 56.80 Oct. 29 low and 56.00 Oct. 28 high.
December's 56.14 10-day moving average technical support level is nestled between the Oct. 29 chart gap.
December's 58.25 Nov. 3 high is a price resistance area.
February's 62.89 10-day moving average is an area of support. The 62.67 Oct. 29 low and 62.25 Oct. 28 high defines February's chart gap.
February's 64.25 July 20 and 64.75 Monday highs are price resistance areas.
Pork bellies could open higher on potential short-covering and late-Thursday's $2 per hundredweight fresh belly price hike that might overtake possible selling leftover from February's limit plunge Thursday.
February's 84.33-cents 40-day moving average is a support point. The contract's 85.60 20-day moving average is a resistance mark.
Cattle Complex
Analysts and brokers anticipate a weak CME live cattle live cattle start.
Market participants will likely factor in cash sales so far this week. Cash-basis cattle in Kansas were reported as low as $85 per hundredweight to as much as $88 in the Texas/Oklahoma region.
While more cattle are left to sell in parts of the Plains, there are areas where fed cattle business is done for the week. Last week's overall fed cattle trade was mostly $87.
Some in the pit are looking ahead to next week's cash sales that already face obstacles given Thursday's boxed beef price slippage and unprofitable beef packer margins.
The U.S. Department of Agriculture's Thursday evening boxed beef data showed choice cuts down $0.52 per hundredweight, and select items were off $0.04.
The latest operating margin index for beef packers was minus $22.10 per head, compared with minus $20.20 the previous day, as calculated by HedgersEdge.com.
Furthermore, beef demand could take a backseat to poultry and hams during the Thanksgiving Day holiday.
Meanwhile, U.S. equities' slide in response to disappointing October jobs figures may at first discourage far-month cattle buyers.
Nonetheless, week's-end position squaring, which may include short-covering, and "Goldman roll" activity may fan market volatility.
December's 86.20-cents 20-day moving average is a support area. The contract's 86.50 10-day moving average is a resistance obstacle.
February's 86.89 20-day moving average is a support floor. The contract's 87.34 10-day moving average is a resistance threshold.
Feeder cattle could open down slightly as well on potential profit-taking, January's overbought chart condition and futures' premiums to the exchanges index.
November's 95.60-cents Thursday low is a price support level. Thursday's low and the 95.50 Wednesday high are November's chart gap boundaries.
November's 95.72-cents 40-day moving average is a resistance barrier.
January's 96.95 Thursday low serves as a price support level. The contract has a chart gap between Thursday's 96.95 low and the 96.72 Wednesday high.
January's 97.50 Thursday high is a price resistance target.
(To access the daily livestock market data recap report, keyword search for "Livestock Market Fundamental Data Recap.")
-By Theopolis Waters; Dow Jones Newswires; 312-559-4965; theopolis.waters@dowjones.com
(END) Dow Jones Newswires
11-06-09 0945ET
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