Ag futures couldn't sustain Wednesday morning gains
Wednesday’s financial market developments also boosted cattle futures in early trading, since the combination of stock index gains and U.S. dollar weakness as boosting domestic and export demand, respectively, for red meat. Choice beef cutout values declined around midday, which probably played a significant role in undercutting the early gains. Indeed, the nearby contracts traded in negative territory into the noon hour. Having the nearby February contract rebound substantially from its midsession low seems supportive of short-term prospects, but one has to wonder if cattle futures will test underlying support during the days just ahead. February cattle dipped to 132.12cents/pound, down 0.17 cents, in late-morning trading, while its April counterpart slumped 0.40 cents to 135.95 cents/pound at midsession.
Talk that the cash hog and wholesale pork markets were firming almost surely accounted for the persistent strength CME lean hog futures exhibited Wednesday morning, thereby enabling the swine contracts to outperform their neighbors in the cattle pit. That is, despite the bearish short-to-intermediate price implications of last Friday’s quarterly Hogs & Pigs report, hog futures proved relatively stable in the face of concurrent agricultural market losses. Ultimately, anticipation of seasonal gains from January 1 through mid-February probably limited mid-session losses. February hogs were down 0.05 cents to 86.55 cents/pound around noon, Thursday, while the June contract had risen 0.15 cents to 98.00.
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