Market News

Premium to cash pressures hog futures

 

 

Chicago Mercantile Exchange live cattle futures were mostly lower ahead of the week’s widespread direct cash business. Spread trade and profit taking were also features. April was up $.60 at $122.52 and June was down $1.22 at $104.35.

Feeder cattle were mostly lower on the same factors as the live pit. April was $.32 higher at $140.17 and May was $1.05 lower at $140.30.

Most of the major feeding areas stayed quiet, continuing the week’s pattern. Scattered sales were reported at $118 live in Colorado and $121 in Kansas and Texas, along with mostly $193 dressed in Iowa. What direct trade we have seen this week has generally been very light, not enough to establish a trend. Asking prices were reported at $125 live and $200+ dressed, with bids of $121 live and $190 to $192 dressed. Buyers and sellers will continue to monitor the futures market, wholesale business, and basis levels. Widespread trade will apparently wait until Friday. Weekly beef exports were down a little on the week at 18,500 tons.

Boxed beef closed higher on moderate to good demand for moderate to heavy offerings. Choice was $1.55 higher at $220.08 and Select was $1.33 higher at $204.48. The estimated cattle slaughter of 119,000 head was unchanged on the week and up 4,000 on the year.

At the Mobridge Livestock Exchange in South Dakota, there was no comparison, as the offering was too light, but the USDA says demand was moderate to good for an offering made up of packages. Medium and Large 1 feeder steers weighing 500 to 600 pounds brought $177 to $177.50 and steers weighing 650 to 700 pounds ranged from $165 to $165.25. Medium and Large 1 feeder heifers weighing 500 to 600 pounds were reported at $157.50 to $166.50 and 700 to 800-pound heifers sold at $135 to $141.50.

Lean hog futures were lower on the premium to cash, along with pork supply and demand uncertainties. Also, the pork market is firming, but maybe not to the degree some analysts were expecting, and direct prices have been lackluster all week. June was $1.35 lower at $74.00 and July was down $1.12 at $77.30

Cash hogs were mixed with another round of light closing negotiated numbers for the direct markets. Either market ready numbers aren’t tightening as fast as expected, packers are running into resistance to their lower bids, or buyers did a much better than expected job of getting kill floors current last week. Futures are currently carrying a significant premium to cash business and while wholesale business has shown signs of seasonal improvements, there’s a lot of pork available and some export demand uncertainties. Saturday’s kill is expected to be around 50,000 head. Weekly pork sales were up 47% on the week at 26,400 tons.

Pork closed $.64 lower at $67.85. Loins were higher and butts were up $2.39, while the other primal cuts were weak to sharply lower, with a contra-seasonal $4.42 drop in bellies. The estimated hog slaughter of 464,000 head was steady on the week and up 24,000 on the year.

Iowa/Southern Minnesota direct barrows and gilts closed $.07 lower at $52 to $59 for a weighted average of $58.42, but the Western Cornbelt was $.08 higher at $52 to $59 with an average of $58.42 and national direct business was up $.02 at $52 to $59 for an average of $58.32. Butcher hogs at the Midwest cash markets were steady to $2 lower at $37 to $42. Missouri direct butchers were steady at $45 to $52 on light to moderate supply and demand. Sows were steady at $30 to $44. Illinois direct sows were $2 higher at $32 to $45 on moderate demand for light to moderate offerings. Barrows and gilts were $1 higher with moderate demand and offerings. Boars ranged from $8 to $17.