Sluggish exports weigh on grains
Live cattle futures are a little higher. Futures are higher mainly on optimism that the fiscal cliff can be avoided. The outside markets are providing a boost. Beef prices were higher on Wednesday, but concern about beef demand lingers. Weekly beef export sales were disappointing at 11,800 MT, down 23% from the previous week and 22% below the four week average. February cattle are 27 cents higher at $131.87.
Lean hog futures are higher at midday Thursday. The rally in hog futures is continuing this morning as due to strength in the cash market. Cash hog prices have increased by about $4 per cwt over the past week and early reports indicate higher bids again on Thursday. Retail demand for hams for the holiday is strong, and packers are willing to boost bids to get the hogs they need. However, packer margins are narrowing as the increases in cash hog prices are larger than the increases in pork prices. The real test will come in a couple of weeks, when the strong holiday related demand begins to back off. The February contract is very close to $88 per cwt at midday.