Hog traders seem confused as to how they should react to the ongoing breakdown in cattle and beef prices, since it is not entirely clear how strongly events in the cattle/beef complex actually affect the hog and pork situation. We believe that effect is quite large, so usually look for limited hog/pork strength, at best when cattle and beef prices are falling. The slippage suffered by pork cutout values last week would seem to exemplify that point, since the wholesale market traditionally proves relatively strong at this time of year. On the other hand, hog prices could advance significantly if/when the cattle market bounces. February hogs settled 0.62 cents lower, at 85.35 cents/pound last Friday, whereas June futures inched 0.05 cents higher to 96.850.
Cotton futures sustained their recent surge last week, due largely to ideas that strong Chinese buying for its strategic reserve is removing that product from the international market for the foreseeable future. Still, ideas that U.S. cotton plantings will fall again in 2013 seem to be supporting prices as well. Finally, technicians have apparently jumped upon the bullish bandwagon as well, with the recent penetration of overhead resistance associated with the 200-day moving average for March futures seemingly opening the door to a larger advance. March cotton rose 0.30 cents to 78.83 cents/pound in early morning activity, while December added 0.18 cents to 79.36.