CME lean hog futures were mixed in Tuesday night trading, thereby probably reflecting the bullish pull of Tuesday’s cattle strength and the potential for short-term seasonal weakness faced by the hog and pork complex. That is, unless some of the other cuts exhibit signs of fresh strength during the days ahead, the traditional pre-holiday breakdown suffered by the ham market at this time of year could weigh heavily upon hog and pork values. Cutout was essentially unchanged Tuesday afternoon, while the direct markets fell moderately. February hogs were unchanged at 84.15 cents/pound, while the June contract slipped one tick to 99.02 cents/pound.
Cotton futures reacted well to the supportive elements of the WASDE report Tuesday. The USDA cut estimated U.S. production and boosted its export forecast, thereby lowering projected 2012-13 ending stocks to 5.4 million bales. In addition, the USDA suggested that China would purchase the bulk of its 2012 crop for its national reserve, thereby reducing supplies available to its domestic mills. The strong reaction pushed the March future above trendline resistance in place since late August, which may have set the stage for further gains. However, prices set back to test that line from above in overnight trading. March cotton slipped 0.09 to 74.81 cents/pound in early activity and the December future fell 0.15 to 77.98 cents/pound.