Crop markets were hit by profit-taking Wednesday night
After declining rather substantially over the week prior, country hog prices apparently posted a strong upside reversal Wednesday. That news, along with the Tuesday afternoon wholesale report indicating pork loin values had boosted carcass values substantially, might easily have been viewed as the trigger for a fresh hog futures rally. Chicago prices did rise moderately as a consequence. However, the pork cutout gave back its Tuesday gain yesterday afternoon, with a quick reversal in loin values apparently undercutting the wholesale market once again. We have to wonder if the recent decline in beef cutout is pushing pork values downward as well. If so, that might bode ill for the late winter-early spring hog and pork outlook. Still, hog futures advanced moderately in overnight electronic activity, thereby implying there are still lots of optimists around. February hogs inched 0.07 cents higher, to 87.17 cents/pound, in the early morning hours, while June futures gained 0.40 cents to 98.47.
Bulls continued their stampeded through the cotton market Wednesday, with the March futures actually posting the highest close for a nearby contract since last June. The Chinese government program designed to support its cotton farmers, which has reportedly absorbed 85% of its 2012 domestic production is playing a major role in the bull market, especially traders doubt that product will return to the open market in the foreseeable future. One side effect of the current situation is apparently having traders ignore developments that might normally undercut prices. As a consequence, we have to wonder if overnight news that a Chinese trade association expects its 2013 plantings to fall 4.5% below those from 2012 (due to spiraling labor costs). We are inclined to expect a short-term technical setback, but the results of the results of the weekly Export Sales report will very likely set the tone for trading through the balance of the ICE session. March cotton slipped 0.31 cents to 82.65 overnight price action, while new-crop December skidded 0.26 cents to 80.85.