The winter storm that swept the Central Plains Thursday created substantial logistical problems for the hog and pork industry, which is a major reason prices have remained firm in late-week trading. The ultimate impact of the storm, if any, is not clear. Transportation problems could certainly tighten market-ready hog and pork supplies at this point, but they also raise the potential for a backlog of animals on farms. In addition, traders are having to balance potential year-end cash and wholesale weakness against the strong possibility that swine values will surge in early 2013. These conflicts may underlay the mixed price shifts seen this morning. February hogs were unchanged at 86.45 cents/pound just before noon, while the June contract had risen 0.17 cents to 100.52.
As has been rather routine this week, cotton futures once again followed the lead of the grain and soy complexes Friday morning, moving moderately higher in concert with them. Still, bulls were probably disappointed by the size of the rise, since cotton has held up much better than its crop counterparts lately. The fact that it has not fallen significantly below its 10-day moving average since mid-November would suggest it will soon resume its upward march. We wonder if it is also suffering from accelerated position-squaring, with bulls exiting longs at this point. March cotton rose 0.27 cents to 76.10 cents/pound by midsession, while December gained 0.07 to 78.30 cents/pound.