Grain prices to open higher after overnight trading
Despite the big cattle rally Friday and indications of considerable cash strength in early-morning trading, CME lean hog futures finished last week on a down note. The prospect of a substantial slowdown in pork buying during the run-up to the year-end holidays, as well as depressed packer buying during that same period probably upon swine values. That weakness could resume today, since the late afternoon pork report indicated a 1.6-cent dive in wholesale values. However, bulls hang their hats upon Friday afternoon reports of cash strength, since they believe the country markets will move upward once the current ham-led pork breakdown runs its course over the next two weeks or so. February hogs fell 0.50 cents to 85.45 last Friday, while June slipped 0.17 cents to 99.90 cents/pound to end the week.
The result of the weekly cotton sales report were rather disappointing, thereby setting a negative tone for Thursday trading. The concurrent losses suffered by corn and wheat probably added to the downward pressure upon the white fiber market. The gains posted earlier in the weak may have opened the door for a setback as well. Conversely, overnight advances in the grain and soy complexes very likely encouraged buying in the cotton pit. Little apparent news emerged late Thursday or early Friday. March cotton seems set to open the New York trading day 0.34 cents higher at 74.90 cents/pound, while December inched 0.07 higher to 77.70.
Active U.S. exports and spillover strength from the soybean market have apparently offered solid support for cotton futures recently. Indeed, the gains posted last week may have opened the door for a sizeable technical advance in the near future. As with corn, there was a dearth of cotton news over the weekend, so we can probably credit early-morning gains to its upward momentum and to the bullish influence being exerted by soybean futures. March cotton is beginning the week having advanced 0.34 cents higher at 75.43 cents/pound, while its December counterpart slipped one tick to 78.23.