Market News

Cattle supported by technical buying ahead of widespread direct trade

Chicago Mercantile Exchange live cattle futures were higher on technical buying and cash optimism as traders get ready for widespread direct business. The gains, and trade volume, picked up steam as the session went on, which could help contracts hold at support points later, even with today’s finish just below the highs. February was up $2.87 at $120.97 and April was $2.40 higher at $122.77.

Feeder cattle were sharply higher on technical buying and cash optimism, along with a general lack of selling interest prior to this week’s direct trade. January was $2.27 higher at $147.87 and March was up $2.05 at $145.97.

Direct cash cattle markets stayed at a standstill. Asking prices were around $122 to $123 on the live basis and $195+ dressed. Outside of a few bids at $118 live and $189 to $190 dressed, packer inquiry was light, with widespread business delayed until Thursday or Friday. Buyers and sellers will be watching futures and wholesale trade, along with the weather in the major U.S. feeding areas. The weekly offering for the Fed Cattle Exchange was 304 head, 108 of which sold, all in Texas for 1 to 9 day delivery at $119.75, up $.75 from last week’s weighted average.

Boxed beef closed modestly lower on light to moderate demand and offerings. Choice was $.28 lower at $205.30 and Select was down $.28 at $199.61. The estimated cattle slaughter was 117,000 head, down 1,000 on the week, but up 2,000 on the year.

At the Kingsville Livestock Auction feeder cattle sale in Missouri, steers weighing less than 550 pounds and heifers from 500 to 600 pounds were $5 to $12 higher, with other weights steady to $5 higher, except steers weighing more than 750 pounds, which were $2 to $5 lower. The USDA says the offering was high quality and more attractive than last week, with very good demand for those sharply higher steers and heifers, most of which will head to grass in spring. Weather issues limited this week’s run and had an impact on many auctions throughout the region. Most of the run were steers weighing more than 600 pounds. Medium and Large 1 feeder steers weighing 600 to 680 pounds were reported at $155 to $168.50 and 720 to 780 pound steers sold at $140 to $161. Medium and Large 1 feeder heifers weighing 610 to 700 pounds ranged from $145.50 to $154.75 and 700 to 770 pound heifers brought $139.25 to $143.25.

Lean hog futures were mostly lower on profit taking, spread trade, and the mixed cash, pulling back from the new high in February set on Tuesday. Also, it looks like pork may have run out of steam for now, but part of that may be the impact of winter weather on consumer demand. Relatively low trade volume apparently limited losses in some contracts. February was down $1.17 at $72.72 and April was down $.62 at $75.52.

Cash hogs were mixed. Winter weather has created movement issues in some areas, but that should ease at least in the Midwest over the next few days. Narrowing processing margins may be limiting demand. This week’s kill is expected to be around 2.4 million head, trimmed by Monday’s holiday. The average Iowa/Southern Minnesota direct barrow and gilt weight for the week ending January 13th was 284.8 pounds, down 0.7 on the week, but up 2.9 on the year.

Pork closed $.24 higher at $80.95. Butts, picnics, and ribs were sharply higher, while loins, hams, and bellies were lower. The estimated hog slaughter was 444,000 head, 16,000 less than last week, but 1,000 more than last year.

Iowa/Southern Minnesota direct barrows and gilts closed $.16 lower at $62 to $71 for a weighted average of $69.63, the Western Cornbelt was down $.05 at $62 to $71 with an average of $69.62, and national direct business was $.07 lower at $62 to $71 for an average of $69.64. The Eastern Cornbelt had no recent comparison with a range of $67.50 to $70 and an average of $69.67. Butcher hogs at the Midwest cash markets were steady to $1 higher at $44 to $50. Missouri direct butchers were steady to $1 higher at $61 to $62 on light to moderate supply and demand. Sows were steady at $28 to $36. Illinois direct sows were $1 higher at $27 to $41 on moderate demand for moderate offerings. Barrows and gilts were firm at $43 to $50 on moderate to good demand for moderate offerings. Boars ranged from $7 to $25.