Market News

Cattle futures supported by cash, wholesale business

 

Chicago Mercantile Exchange live cattle futures were sharply higher on commercial buying, Monday’s sharply higher midday boxed beef, and last week’s higher direct cash business. April was up $2.37 at $121.72 and June was $1.15 higher at $104.87.

Feeder cattle were up sharply on the same factors as the live pit. April was $1.72 higher at $139.02 and May was up $1.27 at $140.60.

Direct cash cattle markets were quiet. The big feature was the distribution of this week’s new showlist, which looks smaller overall, especially in Nebraska and Texas, contrary to some early expectations. Asking prices are not yet established but are expected to be higher after last week’s business. Formula and trade volume totals were up on the week. Last week’s slaughter was 624,000 head, the largest in about six months, and wholesale business is starting to show signs of improving, with warmer weather and grilling season on the horizon.

Boxed beef closed sharply higher on moderate demand for moderate to heavy offerings. Choice was up $3.13 at $215.11 and Select was $1.59 higher at $201.72. The estimated cattle slaughter of 117,000 head was up 1,000 on the week and 2,000 on the year.

At the Oklahoma National Stockyards feeder sale Monday, compared to the previous week, feeder steers and heifers were $1 to $4 higher, while steer and heifer calves were $1 to $3 higher, albeit in a limited test. The USDA says demand was moderate to good, with average to attractive quality. Medium and Large 1 feeder steers weighing 600 to 700 pounds sold at $153.50 to $172.50 and 800 to 900-pound steers were reported at $125 to $143. Medium and Large 1 feeder heifers weighing 600 to 700 pounds ranged from $137 to $153.50 and Medium and Large 1 to 2 heifers weighing 700 to 800 pounds brought $120.50 to $127.75.

Lean hog futures were sharply lower on the recent trend in the wholesale market, concerns about export demand, and position squaring ahead of the monthly cold storage numbers. With the recent high production levels, slow domestic demand, and international trade uncertainties, the trade was expecting a big number, and total pork supplies were up slightly on the month and 12% on the year. June was $1.17 lower at $76.37 and July was down $1.12 at $78.90.

Cash hogs were mixed, with very light closing negotiated numbers at the major direct markets. It takes more than one day to build a trend, but either buyers at the major directs had the needed early week numbers in hand or they ran into resistance against their lower bids. The wholesale pork market hasn’t really seen its seasonal rally yet, but that could be just around the corner, with warmer weather expected in many parts of the U.S. The big issue really for the industry is the pork supply. A free trade agreement recently reached between Mexico and the European Union is expected to make most E.U. pork sales to Mexico duty free. Mexico is a big buyer of U.S. pork and NAFTA renegotiations are ongoing.

Pork closed $.04 lower at $67.87. Hams were weak and bellies dropped $2.78, while the other primal cuts were higher. The estimated hog slaughter of 464,000 head was unchanged on the week and up 21,000 on the year.

Iowa/Southern Minnesota direct barrows and gilts closed $.45 lower at $52 to $58.50 for a weighted average of $57.80, the Western Cornbelt was down $.30 at $52 to $58.50 with an average of $57.63, and national direct business was $.09 lower at $52 to $58.50 for an average of $57.67. Butcher hogs at the Midwest cash markets were steady to $2 higher at $35 to $44. Missouri direct butchers were steady to $4 higher at $45 to $52 on light to moderate supply and demand. Sows were steady to $5 higher at $30 to $44. Illinois direct sows were steady at $30 to $44 on moderate demand for moderate offerings. Barrows and gilts were steady at $33 to $40, also on moderate demand for moderate offerings. Boars ranged from $8 to $17.