Market News

Cattle futures mixed ahead of direct cash, USDA report

 

Chicago Mercantile Exchange live cattle futures were mostly higher in slow trade, with support from the firm to modestly higher midday boxed beef. It was an up and down session, with traders waiting for the week’s direct cash business to develop. The USDA’s monthly Cattle on Feed report is out Friday at 3 PM Eastern/2 Central. April was up $.90 at $118.05 and June was $.72 higher at $104.90.

Feeder cattle were mixed, mostly firm, getting ready for widespread direct business and the on feed report. The weakness in corn was largely ignored. April was down $.50 at $138.72 and May was $.12 lower at $140.25.

Direct cash cattle markets stayed at a standstill. A few bids by a regional buyer were reported in Nebraska at $190 and asking prices were not well defined, so buyers and sellers will continue to monitor wholesale business and the futures market. If chain speed accelerates as expected, it’ll put more product on the market, with demand uncertainties connected to China and NAFTA. This week’s offering at the Fed Cattle Exchange is 3,220 head, with results out Wednesday. The USDA’s final 2017 red meat production numbers are also out Wednesday, with the March 2018 totals due on Thursday. Both reports are scheduled for 3 PM Eastern/2 Central.

Boxed beef closed mixed on light to moderate demand for moderate to heavy offerings. Choice was up $.34 at $212.13 and Select was down $.40 at $199.58. The estimated cattle slaughter of 120,000 head was up 1,000 on the week and 4,000 on the year.

At the Joplin Regional Stockyards in Missouri, compared to the previous week, feeder steer calves were steady to $4 lower, heifer calves were steady, and yearlings were steady to $4 higher. The USDA says demand was moderate to good for a moderate supply. Half of the run were steers and 54% of the weekly offering weighed less than 600 pounds. Medium and Large 1 feeder steers weighing 400 to 500 pounds brought $170 to $190 and 500 to 600-pound steers were reported at $157.50 to $177. Medium and Large 1 feeder heifers weighing 400 to 500 pounds ranged from $147.50 to $166 and 500 to 600-pound heifers sold at $142 to $153.

Lean hog futures were mixed, mostly modestly higher on commercial spread activity, short covering, and the mixed cash during the session. Also, seasonal pork demand is slow to surface with cooler than normal conditions in many parts of the U.S. delaying the onset of grilling season. June was down $.05 at $75.75 and July was up $.55 at $19.22.

Cash hogs were mixed, with another no better than moderate closing negotiated run for the major direct markets. If this week’s closing numbers are any indication, those buyers will have to raise bids further to keep chain speed at the needed level. A big question continues to be pork demand, at least partially because of uncertainties surrounding international trade. A potential solution for NAFTA has no timetable and the Chinese tariff issues remain unresolved. The USDA’s next set of cold storage numbers is out on Monday the 23rd at 3 PM Eastern/2 Central.

Pork closed $.06 higher at $68.21. Loins, butts, and bellies were up, while picnics, ribs, and hams were down. The estimated hog slaughter of 468,000 head was up 17,000 on the week and 22,000 on the year.

Iowa/Southern Minnesota direct barrows and gilts closed $1.12 higher at $48 to $54.50 for a weighted average of $52.70, the Western Cornbelt was up $1.07 at $45 to $54.50 with an average of $52.60, and national direct business was $1.19 higher at $45 to $54.50 for an average of $51.96. Butcher hogs at the Midwest cash markets are steady to $2 lower at $32 to $34. Missouri direct was steady at $43 to $47 on light to moderate supply and demand. Sows were steady at $25 to $40. Illinois direct sows were steady at $30 to $46 on moderate demand for moderate to heavy offerings. Barrows and gilts were mostly steady at $29 to $37 with moderate demand for moderate to heavy offerings. Boars ranged from $8 to $17.