Although Friday afternoon reports concerning the cash hog and wholesale pork markets were generally favorable, CME swine futures ended the week having slipped modestly. Premiums already built into Chicago prices may have made it rather difficult to push them higher, since the CME lean hog index remains several cents below the nearby contracts (and far below the bullish forecasts implicit in deferred futures). Still, bulls seem likely to benefit from the traditional seasonal country market advance during the first six weeks of the year. February hogs ended last week having slipped 0.17 cents to 86.22 cents/pound, while June futures lost 0.20 cents to 98.75 at the close.
Cotton futures seemed to decline in concert with the grain and soy complexes last Friday. As pointed out in the past, cotton and soybeans routinely compete for acreage across the Southeast most years, so price shifts in the latter market often exert considerable influence over in the former early in the year. That didn’t seem to be the case in late 2012, since cotton rose substantially in the face of sizeable soy losses in recent weeks. Their recent divergence resumed in early morning trading, with beans rising and cotton declining. The latter move seems particularly surprising since the market was boosted by talk of robust Chinese imports during the coming weeks and by a technical bounce from major support last Friday. Traders may simply feel cotton has to do more to consolidate its December surge before it can resume that advance. March futures slipped 0.17 cents to 74.86 cents/pound in pre-dawn action, whereas the December contract edged 0.08 cents higher to 79.18 cents/pound.