Early-to-mid-week cash gains and widespread expectations for much of the same supported lean hog futures late last week. Not only was the nearby February contract trading at a discount to spot values, seasonal patterns historically imply sustained cash strength over the next 2-3 weeks. However, late-week cash and wholesale weakness appeared to undercut the Chicago swine market Friday afternoon. Late reports of sizeable cash losses had to be particularly disappointing, since many sources had argued that pork packers were running short of animals for operations planned for next week. We have to wonder if the Russian-ractopamine issue is becoming an obstacle to short-term bullish hopes. February hogs closed 0.22 cents to 86.82 cents/pound Friday afternoon, while June futures fell 0.52 cents to 97.12.
Cotton traders were very likely disappointed with the results of the Friday morning Export Sales report, since the stated USDA figure fell well below comparable week-ago and four-week average results. The market was clearly overbought as well, which probably exaggerated the subsequent price decline. The drop carried the nearby March future far back toward the 80-cent level after having reached 84.00 cents/pound Thursday. We tend expect further short-term consolidation in the wake of the big surge posted last week, but we will not argue that the modest gains posted in Sunday night trading does not represent a quick resumption of the recent advance. March cotton rose 0.23 cents to 80.75 cents/pound in Monday morning action, while December climbed 0.30 cents to 80.00.