Market News

Heavier carcass weights pressure hog futures

Chicago Mercantile Exchange cattle futures ended the day modestly higher.  Most of the day’s action was due to prices getting close to becoming oversold. Pressure from the lower wholesale trade limited gains.  Look for any cash movement to strongly influence the balance of trade this week.  December live cattle closed $.70 higher at $120.20 and February live cattle closed $.60 higher at $125.75.  November feeder cattle closed $.37 higher at $159.00 and January feeder cattle closed $.35 higher at $154.25.

Light to moderate trade developed in most areas at $119 in the South, generally $3.00 to $4.00 lower than last week’s weighted average but steady with the previous day’s light trade.  Northern dressed trade was light and $2.00 to $4.00 lower than the previous week’s weighted average basis in Nebraska.

Boxed beef closed weak on Choice and sharply lower on Select on light to moderate demand and moderate to heavy offerings.  Choice closed $.54 lower at $210.13 and Select ended the day $2.88 lower at $190.61.

At the Union Livestock Market in Oklahoma compared to last week steer calves were $3.00 to $6.00 higher and heifer calves were $5.00 to $10.00 higher with some instances of $15.00 higher.  Receipts were 3,100 head – up 1,000 from the previous week.  The USDA says demand was very good and quality was average through attractive with some groups of very attractive calves.  Feeder supply included 42 percent heifers and 25 percent of the offering was over 600 pounds.  Feeder steers, Medium and Large 1’s 550 to 600 pounds were $152.00 to $165.00 and Medium and Large 1’s 650 to 700 pounds were $136.00 to $149.00.  Feeder heifers, Medium and Large 1’s 550 to 600 pounds were to $138.00 to $151.00 and Medium and Large 1’s 600 to 650 pounds were $123.00 to $136.00.

Estimated cattle slaughter is 118,000 head, up 2,000 on the week and 3,000 on the year.

Lean hog futures closed mostly lower pressured by a second week in a row of heavier carcass weights and position squaring relative to the cash index.  Lower pork values also added pressure to prices.  December lean hogs closed $1.15 higher at $61.12 and February lean hogs closed $.05 lower at $67.45.

Cash hogs ended moderately lower after opening sharply lower. Up until today – strength in the cash market has faded at a much slower pace than futures.  But, packers have decent leverage and with strong market ready numbers, slaughter numbers don’t look to slow anytime soon – and prices will likely continue their decline.

Barrows and gilts at the Iowa/Southern Minnesota ended the day $.48 lower with a range of $53.00 to $58.76 and an average of $58.25; the Western Corn Belt closed $.59 lower with a range of $53.00 to $58.75 and an average of $58.11; the Eastern Corn Belt had no comparison with a range of $55.00 to $58.57 and an average of $58.07; the National Daily Direct closed $.55 lower with a range of $53.00 to $58.75 and an average of $58.09.

Butcher hogs at the Midwest cash markets were steady to $3.00 lower at $36.00 to $46.00.

At the Interior Missouri Direct, barrows and gilts were steady at $52.00 with light to moderate supply and demand.  Sows were steady at $33.00 to $45.00.

At Illinois, slaughter sow prices are $1.00 higher at $38.00 to $49.00 with very good demand for very heavy offerings.  Barrows and gilts are weak at $36.00 to $45.00 with light to moderate demand for moderate offerings.

Pork value ended the day lower – down $1.18 at $80.63.  The strongest declines were in the butt and the ham.

Estimated hog slaughter is 465,000 head – even with last week and up 22,000 on the year.