Hogs defy fundamentals at midday

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Corn futures are trading slightly higher at midday. As of this writing, corn futures have now moved above unchanged, although slightly. Futures are expected to remain under pressure after USDA reported that corn harvest is moving at an exceptionally rapid pace. Twenty-six percent of U.S. corn is now harvested. Also, another significant drop in the soy complex along with strength in the dollar could cause prices to slip back toward steep losses.

Soybean futures are trading 8 to 10 cents higher at midday. Prices have improved from the double digit losses incurred overnight. After a tumultuous day of trade on Monday, soybean futures are paring losses on market short covering. However, market prices will continue to feel pressure from improved weather in Brazil and better than expected yield conditions. Soybean oil is trading mixed at midday while soybean meal is trading $2-$3 lower.

Wheat futures are trading mixed at midday. As of this writing, wheat futures are randomly mixed with firm pressure developing in the Chicago market tied to strength in the dollar index. Lack of fresh news and weakness in the soybean market could potentially pull prices lower. CBOT wheat is trading 5 cents lower: KCBT is trading 3 cents lower; and MGE is trading 2 cents higher.

Live cattle futures are trading mixed at midday. After modest losses on yesterday, prices have rebounded at the opening of pit trade, however slight pressure has developed in the December and early 2013 contracts. Prices are supported the jump in boxed beef prices and optimism for higher cash prices. Monday’s closing boxed beef prices jumped over $1.50 for both choice and select cuts. Concerning the cash trade, movement is not expected until the latter half of the week but preliminary prices are called steady to $2 higher.

Lean hog futures are trading 65 to 77 cents higher at midday. Contrary to expectations, hog futures are defying fundamentals to trade higher at midday. The recent rise in cash prices may have encouraged optimistic buying in hopes that hog prices have finally hit bottom. The average cash hog price reported by USDA on Monday reported prices 74 cents higher.



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