Market News

Cattle futures start week sharply lower

 

Chicago Mercantile Exchange live cattle futures were sharply lower on follow through technical selling and long liquidation, while watching the distribution of this week’s generally larger direct cash showlist. Futures’ discount to cash doesn’t seem to be an issue, yet. The bearishness in the outside markets was also a factor. April was $1.02 lower at $120.22 and June was down $1.60 at $110.15.

Feeder cattle were pressured by the same factors as the live pit. March was down $1.52 at $138.45 and April was $2.00 lower at $138.20.

Direct cash cattle markets were at a standstill. The day’s big activity was the distribution of this week’s new showlist. The ready numbers look larger, except for Texas. Widespread business could wait until the second half of the week, maybe even after Friday’s cattle on feed report, but widespread business last week started Tuesday, jumpstarted by an attractive basis. Asking prices are expected to start around $129 live and $207+ dressed. Last week’s business was reported at mostly $127 live in the South and $204 to $205 dressed in the North. Formula totals were lower on Kansas and Texas, higher in Nebraska, while trade volume totals were down sharply for Nebraska and just a little smaller in Kansas and Texas.

Boxed beef closed mixed on light to moderate demand and offerings. Choice was down $.72 at $224.87 and Select was up $.43 at $217.29. The estimated cattle slaughter of 118,000 head was up 5,000 on the week and 2,000 on the year.

At the Oklahoma National Stockyards in Oklahoma City Monday, feeder steers were $3 to $6 lower, while the lightly tested feeder heifers were $3 to $4 lower. The USDA says demand for feeder cattle was light to moderate. Medium and Large 1 feeder steers weighing 600 to 700 pounds brought $151 to $185 and Medium and Large 1 to 2 steers weighing 700 to 800 pounds were reported at $132 to $142.50. Medium and Large 1 feeder heifers weighing 500 to 600 pounds ranged from $141 to $155 and 600 to 700-pound heifers sold at $134.50 to $147.

Lean hog futures were sharply lower on the weak midday pork, commercial selling, and mostly lower cash during the session. Most of the trade seems to be anticipating that bearish cash and wholesale pattern to continue, offsetting the oversold technical signals. Export demand uncertainties continue to lurk in the background. April was $2.30 lower at $63.15 and June was down $2.30 at $76.82.

Cash hogs were mostly lower, with packers gaining leverage as the day went on. Market ready supplies are ample and chain speed is expected to stay at a high pace, with weekly kills possibly topping 2.4 million head over the next couple of weeks, putting more pressure on wholesale business. That generally lower trade in cash and the wholesale market has put a lot of pressure on futures, with April lean losing more than $2 last week, going against the usual seasonal trend.

Pork closed $.55 lower at $71.98. Loins, hams, and bellies were down, butts, picnics, and ribs were up. The estimated hog slaughter of 462,000 head was up 2,000 on the week and 21,000 on the year.

Iowa/Southern Minnesota direct barrows and gilts closed $.67 lower at $52 to $59.50 for a weighted average of $56.44, the Western Cornbelt was down $.65 at $52 to $59.50 with an average of $56.42, and national direct business was $.79 lower at $52 to $59.50 for an average of $56.50. Butcher hogs at the Midwest cash markets were $3 lower at $36 to $40. Missouri direct butchers were steady to $4 lower at $50 to $51 on light to moderate supply and demand. Sows were steady at $33 to $45. Illinois direct is weak at $34 to $50 on light to moderate demand for moderate offerings. Barrows and gilts were $1 lower at $35 to $41 on light to moderate demand for moderate offerings. Boars ranged from $9 to $20.