Weak basis bids, Mississippi River concerns weigh on corn market
Nearby live cattle and feeder futures built upon the big weather-driven surge posted Monday in Tuesday morning trading, since traders are apparently still concerned about the potential negative performance impact of wintry weather moving into the Central Plains today. Such talk and the bullish CME reaction will almost encourage producers to boost their asking prices for fed cattle sharply, whereas flat to weak wholesale values will not encourage packer buying. Nevertheless, bulls rather clearly have the upper hand at this point, as exemplified by the fact that the most-active February future has reached its highest level since last March. February had advanced 0.30 cents to 133.80 cents/pound, while April rose 0.17 cents to 137.75.
Bearish short-term prospects seemed to weigh rather heavily upon the hog and pork complex again Monday. The afternoon slide in direct market swine values across the Corn Belt seemed particularly negative. CME prices continued their slide in early morning trading, possibly due to anticipation of continued seasonal losses by the ham market. However, nearby futures bounced modestly from early morning lows, possibly on strength spilling over once again from the cattle pit. As pointed out previously, hog traders are trying to balance short-term bearish prospects and the potential for a sizeable rebound in early 2013. February hogs inched 0.15 cents higher to 84.82 cents/pound this morning, while its June counterpart rose .05 cents to 99.20.
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