Market News

Higher beef trade supports cattle futures

Chicago Mercantile Exchange live cattle futures were higher, supported by the sharply higher midday boxed beef and position squaring ahead of the USDA’s monthly Cattle on Feed report. The numbers should be bearish, but that may already be dialed in. April was up $.45 at $118.15 and June was $1.02 higher at $108.40.

Feeder cattle were supported by pre-report short covering and the midday strength in the wholesale beef trade. March was $.75 higher at $137.52 and April was up $1.80 at $138.02.

Direct cash cattle markets were quiet, aside from clean-up at $125 to $126 live and $200 to $202 dressed. Light to moderate trade was reported Wednesday in the North, mainly at $126 live, steady with Tuesday and down $2 on the week, and mostly $200 to $203 dressed, steady to $3 lower than last week’s weighted average in Nebraska. After a couple of days of light to moderate activity, the rest of the week’s business will probably be limited to clean-up. The USDA’s Cattle on Feed report is out Friday at 3 Eastern/2 Central. The numbers are expected to be bearish, but may already be priced in, with deferred contracts at a big discount to the recent cash business.

Boxed beef closed higher on light to moderate demand and moderate offerings. Choice was up $.83 at $225.21 and Select was $1.63 higher at $218.02. The estimated cattle slaughter of 119,000 head was up 1,000 on the week and 3,000 on the year.

At the Mitchell Livestock Auction feeder cattle sale in South Dakota, compared to the previous week, steers and heifers were lower. The USDA says demand was moderate, with most cattle carrying moderate to moderate plus flesh, along with some tag. 56% of the offering were steers and 96% of the weekly run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 800 to 900 pounds were reported at $129.25 to $144.50 and 900 to 1,000 pounds steers brought $120.25 to $136.75. Medium and Large 1 feeder heifers weighing 700 to 800 pounds sold at $124.20 to $139 and 800 to 900-pound heifers ranged from $118.25 to $125.50.

Lean hog futures were sharply lower, pressured by cash and wholesale business, along with long liquidation and export demand concerns. The USDA’s monthly livestock slaughter and cold storage numbers were neutral to bearish, but contracts are technically oversold. April was $1.25 lower at $61.32 and June was down $1.75 at $75.47.

Cash hogs were steady to lower with solid negotiated runs at the major direct markets. Buyers were able to take advantage of the available market ready numbers, while maintaining their processing margins. It’s been another volatile week for pork ahead of this afternoon’s livestock slaughter and cold storage numbers. Export demand has been good, but there’s a lot of pork available and a lot of questions about potential trade retaliation from some major U.S. trading partners. The impending expansion of the Seaboard Triumph Foods processing plant in Sioux City, Iowa will double capacity, adding another 10,500 head to the daily kill total.

Pork closed $.71 lower at $70.74. Butts and hams were higher, while the other primal cuts were lower, including a $3.91 drop in bellies. The estimated hog slaughter of 461,000 head was unchanged on the week and up 18,000 on the year.

Iowa/Southern Minnesota direct barrows and gilts closed $1.37 lower at $51 to $55 for a weighted average of $53.93, the Western Cornbelt was down $1.40 at $50 to $55 with an average of $53.83, and national direct business was $1.17 lower at $50 to $55 for an average of $53.97. Butcher hogs at the Midwest cash markets were steady at $36 to $40. Missouri direct was steady at $50 to $51 on light to moderate supply and demand. Sows were steady at $28 to $44. Illinois direct sows were weak at $29 to $45 on light to moderate supply and moderate demand. Barrows and gilts were weak at $35 to $40, also on light to moderate demand for moderate offerings. Boars ranged from $9 to $22.