CHICAGO (Dow Jones)--Chicago Mercantile Exchange hogs settled mostly higher Thursday on short-covering, buy stops and forward-spreading.

February pork bellies, the only contract that traded, ended higher. Live and feeder cattle closed flat to weak.

Lean hogs surged from the outset, fueled by CME Globex hogs that were up sharply in overnight trading. That sent those who were short the market scrambling to cover previously held positions.

Late Wednesday's modest pork cutout rise and initial steady-to-higher terminal cash hog market prices stirred buying interest. Fund-buying and buy stops hastened early advances.

Also, speculative buyers gravitated toward spot-October and nearby-December, which traded nearly inline or at discounts to CME's hog index.

Some traders said the U.S. Department of Agriculture's commitment to buy another $30 million worth of pork to help struggling pork producers was "psychologically" supportive for hog futures Thursday.

Others, however, contend that the USDA's pork purchase would be miniscule compared with current pork production and the amount of pork in U.S. warehouses.

Nonetheless, lean hogs slipped from session tops. October encountered 40-day moving-average resistance and subsequent cash hog prices came in weaker.

And while periodic October/December bull spreads minimized December advances, December/February forward spreads limited December declines.

Hog market participants are expected to square positions on Friday in preparation for the Labor Day holiday weekend and as they gear up for early next week's Goldman roll period.

The roll consists of funds moving some of their spot-October long positions into December. The first of five days for the roll will officially begin on Sept. 8, and it is tied to the Standard & Poor's Commodity Index.

October hogs ended 95 points higher at 49.77 cents a pound, and December closed 80 points higher at 47.65 cents.

February pork bellies closed 187 points higher at 80.87 cents on steady midday fresh belly quotes and buy stops. Also, the lean hogs' rally inspired bullish February belly traders.

Other pork belly months were unquoted.


Cattle Complex


CME live cattle closed flat to weak on profit-taking, sell stops and spreaders who sold December and bought October.

Live cattle spiked at first on follow-through buying from futures' run up on Wednesday, which triggered buy stops. Bullish traders were also optimistic about this week's cash cattle price prospects amid reduced numbers of cattle for sale this week.

Cash-basis cattle packer bids are reported at $82 to $83 per hundredweight against $86 to $87 asking prices. Fed cattle last week moved at mostly $85.

But a few longs pocketed profits as they left the pit for extended holiday downtime. October and December set off sell stops after both contracts slipped beneath Wednesday's highs.

Uneventful U.S. financial trading and CBOT corn's inability to break free of its bearish pull curbed earlier back-month live-cattle-buying enthusiasm.

Another day of waiting could be in store for floor traders as fed cattle buyers and sellers haggle over this week's cash cattle prices. Pre-Goldman-roll business is likely before the start of Tuesday's roll phase.

Bullish and bearish traders on Friday are expected to settler their business affairs before the protracted holiday weekend.

CME livestock pits will close at their regular time on Friday at 1 p.m. CDT.

Feeder cattle ended flat to weak as well on profit-taking, technical resistance and sell stops. Spreaders sold November and bought September.

Some in the pit sold feeder cattle and bought live cattle on spreads.

October live cattle closed down 5 points at 86.72 cents a pound, and December finished down 12 points at 86.67 cents.

September feeder cattle settled down 10 points at 98.50 cents, and October ended down 12 points at 98.37 cents.


-By Theopolis Waters, Dow Jones Newswires; 312-341-5778; theopolis.waters@dowjones.com