The grain and soy markets seem set to open weakly Thursday
The hog market was one of the few to avoid a sizeable setback Wednesday, which probably reflected persistent industry optimism about short-term prospects for cash and wholesale values. That is, seasonally slowing hog and pork production will almost surely be met by improving demand for most cuts during the next six weeks, which largely explains the significant premiums already built into nearby futures. The bullish cause would likely improve if recent year-to-year reductions in hog slaughter were to persist. February hogs edged one tick higher to 86.20 cents/pound in electronic trading last night, while the June contract climbed 0.22 cents to 98.47.
Despite market fundamentals that seem decidedly bearish, cotton futures have recently performed remarkably well, especially in light of concurrent losses in the grain and soy complexes. Strong export sales did a great deal to support the white fiber market during December. Moreover, that news has been reinforced by talk that China will boost its domestic stockpiles above 10 million tonnes. Their buying could obviously provide a great deal of support for prices over the short run, but the resulting stockpiles could also greatly limit subsequent price targets, since the threat of inventory liquidation would hang over the market for the foreseeable future. March cotton futures rose 0.55 cents to 75.91 cents/pound in Thursday morning activity, but December slipped 0.30 cents to 79.36 cents/pound.
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