Cattle futures rose moderately in Thursday morning electronic trading, then accelerated upward after the CME pit session commenced. We are inclined to credit talk of rising cash and/or wholesale prices later in the day, particularly after the noon report showed beef cutout values almost 1.5 cents higher. Given its history of posting a substantial seasonal rally through the first quarter, especially in years when snow and cold dominate the Southern Plains, the cattle market rally was not very surprising. Still, such strength certainly suggests bulls will continue to dominate the cattle market for the foreseeable future. February cattle jumped 1.47 cents to 133.85 cents/pound on the day, while the April future advanced 1.15 cents to 137.32 cents/pound.
The latest hog and pork news has not been particularly supportive of the short-term outlook. For example, pork cutout essentially gave back its Monday gain Wednesday afternoon. Meanwhile, the Iowa-Southern Minnesota hog market declined modestly yesterday and was called about 1.25 cents lower this morning. Nevertheless, CME swine futures followed their counterparts in the cattle pit substantially higher after pit trading began Thursday morning. Market participants may simply think the ongoing cattle surge will lift all boats, especially with the hog and pork complex also exhibiting an historical tendency to rally during the first six weeks of the year. The February contract actually ended the day having given back a substantial portion of its morning advance, closing just 0.22 cents higher at 86.40 cents/pound around, while June futures rose 0.70 cents to 98.95 by the end of the CME pit session.