Bears Going Hog Wild!
Lean Hog bulls ran for the exits this afternoon, as commodity fund liquidation and sell-stops kept prices on the defensive. After making new contract highs of 77.70 on Friday, October Hogs have fallen by over 500 points – mostly on long liquidation selling – as weak pork cut-out values and the steep premium on October Hogs versus the CME cash index had traders looking to lighten on their long positions. Sell-stops were being triggered below the recent lows of 74.00. Traders continue to await confirmation of pork sales to China, as the world’s leading consumer of pork is faced with rising prices due to tight internal supplies. Support for October Hogs is seen at the 20-day moving average at 72.07, with resistance now seen at $74.00. October Lean Hogs closed at 72.57, down 2.47.
Interest rate futures decline as Fed keeps rates steady!
Once again, the Federal Reserve kept rates steady at 5.25% during this afternoon’s FOMC meeting. The key for most traders, however, was the Fed statement after the interest rate announcement in which the Fed acknowledged that "downside risks to growth have increased somewhat,” but that inflation remains the “predominant” concern. Fed Fund futures are now pricing in only a 25% chance that the Fed will lower rates to 5% at the September 18th meeting, down from 35% before today’s announcement. Longer-term interest rate futures finished virtually flat after an initial price spike after the Fed statement, with the September 10-year Note future hovering just below unchanged near the close of the trading pit session. September Fed funds futures closed at 94.7750, down 0.0400, while September 10-year Note futures closed at 107-185, down 0-030.
