Market News

Cattle futures higher ahead of widespread direct trade

 

Chicago Mercantile Exchange live cattle futures were higher on technical buying and the higher midday boxed beef, with traders getting ready for the week’s direct cash cattle business. Still, even with the light volume, the gains weren’t as great as Wednesday and if the trade’s cash optimism isn’t rewarded Friday, profit taking could surface quickly. February was $.97 higher at $121.95 and April was up $.70 at $123.47.

Feeder cattle were higher on technical buying and expectations for higher than a week ago direct cash business, along with the weak corn. January was up $1.30 at $149.17 and March was $1.20 higher at $147.17.

Direct cash cattle markets were mostly quiet, with widespread business waiting until the end of the holiday shortened week. DTN says a couple of hundred head sold in Iowa at $121 on the live basis. Asking prices are $122 to $124 on the live basis and $195 to $197 dressed, with bids of $118 to $119 live and $190 dressed. Futures managed to build on Wednesday’s gains, so the majority of feedlots decided to hold out and wait for Friday. Wednesday’s Fed Cattle Exchange activity was light, but at slightly higher prices than last week.

Boxed beef closed higher on light to moderate demand for moderate to heavy offerings. Choice was up $.39 at $205.69 and Select was $1.26 higher at $200.87. The estimated cattle slaughter of 118,000 head was steady with last week and up 2,000 from last year.

At the feeder cattle auction in El Reno, Oklahoma Thursday, steers were $8 to $10 higher and heifers were $4 to $8 higher. The USDA says demand was very good, supported by futures business, and the overall quality was average to attractive. Some disruption was caused by winter weather. 59% of the offering were steers and 71% of the run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 600 to 700 pounds were reported at $153 to $161.50 and 700 to 800 pounders sold at $146.20 to $155. Medium and Large 1 feeder heifers weighing 600 to 700 pounds brought $136 to $148 and 700 to 800 pound heifers ranged from $134 to $142.

Lean hog futures were mostly higher on spread trade, short covering, and technical support in some months. There was also some light spillover from the gains in the cattle complex. The fundamentals have weakened over the last few days and contracts are at a premium to the cash index, potentially setting the stage for losses Friday, if the buying interest doesn’t follow through. February was up $.32 at $73.05 and April was $.37 higher at $75.90.

Cash hogs were mostly lower. Thursday’s business may lead to at least a few questions about the availability of market ready numbers, with Saturday’s kill only expected to be about 145,000 head. That’s despite good processing margins and the holiday related slowdown earlier in the week. Warmer weather in parts of the Midwest should alleviate some of the recent movement issues.

Pork closed $.28 lower at $80.67. Ribs, butts, picnics, and hams were lower, loins and bellies were higher. The estimated hog slaughter of 432,000 head was down 4,000 on the week and 13,000 on the year.

Iowa/Southern Minnesota direct barrows and gilts closed $.75 lower at $62 to $70.50 for a weighted average of $68.97, the Western Cornbelt was down $.89 at $62 to $70.50 with an average of $68.82, and national direct business was $.31 lower at $62 to $70.50 for an average of $69.39. Butcher hogs at the Midwest cash markets were steady to $1 lower at $44 to $49. Missouri direct were steady to $1 higher at $62 on light to moderate supply and demand. Sows were steady at $28 to $36. Illinois direct sows were $1 higher at $28 to $42 on moderate demand for moderate offerings. Barrows and gilts were firm at $43 to $50 with moderate to good demand for moderate offerings. Boars ranged from $7 to $25.