Market News

Cash cattle pressures futures

At the Chicago Mercantile Exchange, cattle futures closed lower as contracts caved to cash market pessimism.  The significant drop in cash values have been the main source of declining futures contracts.  June live cattle closed $.65 lower at $102.40 and August live cattle closed $.87 lower at $98.22.  May feeder cattle closed $.87 lower at $132.22 and August feeder cattle closed $1.10 lower at $137.62.

Direct cash cattle trade was mostly quiet Friday with just a few cleanup deals reported.  The majority of business had wrapped up by Thursday.  This week saw a wide swing of price ranges – $112 to $118 live and $176 to $192 dressed.  It’s expected at least some of that business is for delayed delivery.

At Herreid Livestock Market receipts were down on the week and the sale had lower undertones.  The USDA says demand was moderate for the very light offering.  Quality was mostly plain to average and flesh was moderate to moderate plus.  Feeder supply included 69 percent steers and 85 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 715 to 744 pounds were $139.75 to $146.50 and feeder steers 809 to 843 pounds were $131.00 to $142.25.  Medium and Large 1 feeder heifers 573 to 592 pounds were $138.00 to $145.50 and feeder heifers 667 to 671 pounds were $127.00 to $133.50.

Boxed beef closed mixed – weak on Choice and steady on Select on light box movement.  Choice down $.47 at $232.21 and Select up $.22 at $208.46.  The Choice/Select spread is $23.75.  Estimated cattle slaughter is 119,000 head – up 1,000 on the week and 5,000 on the year.  Saturday’s estimated kill is 67,000 head up 5,000 on the week and 15,000 on the year.  Lean hog futures closed sharply lower on pressure from supply concerns and trade uncertainty.  Current hog weights are heavier at a time when they should be declining.  Lower carcass values along with contracts’ premium to cash are also pressuring prices.  June lean hogs closed $1.77 lower at $74.70 and July lean hogs closed $.95 lower at $77.25.

At the Iowa Hay Market, prices were fully steady compared to last week.  The USDA says demand was light as pastures recovered with rain and warmer temperatures arriving.  The first cutting of hay is behind as farmers have been catching up from the slow to start cropping season.  Alfalfa supreme small squares brought $280 to $330 and large squares brought $270 to $300.  Premium small squares brought $250.00 to $260.00.  Alfalfa/grass supreme small squares brought $265.00.  Premium small squares brought $215 and premium large squares brought $245.

Cash hogs ended the day weak.  Processor margins are holding, but they could begin to shrink over the next few weeks.  Should demand continue to strengthen, producer margins will likely improve.  Barrows and gilts at the Iowa/Southern Minnesota closed $.46 lower with a range of $59.00 to $66.00 with a weighted average of $65.05; the Western Corn Belt closed $.36 lower with a range of $.59 to $66.00 and a weighted average of $64.85; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.16 lower with a range of $59.00 to $66.00 and a weighted average of $64.89.

Butcher hogs at the Midwest cash markets are steady at $40.00.  The market at Zumbrota, Minnesota are closed on Fridays.  At the Interior Missouri Direct, receipts are up on the week and the year.  Barrows and gilts are steady at $52.00 to $58.00 with light to moderate supply and demand.  Sows are steady at $30.00 to $43.00.  For the week barrows and gilts are steady to $4.00 higher and sows are $2.00 to $4.00 lower.  At Illinois, slaughter sows are steady at $30.00 to $44.00 with moderate demand for moderate offerings. Barrows and gilts are steady at $37.00 to $46.00 with moderate demand for moderate offerings.

The USDA says early-weaned pigs were $2.00 per head lower. Demand was moderate for moderate offerings.  Receipts included 33 percent formulated prices.  Total composite formula rage was $35.42 to $46.00 with an average of $37.36.  Total composite cash range was $20.00 to $36.00 with a weighted average of $29.07.  The average for all early weaned pigs was $31.97 and the average for all feeder pigs was $55.25.

Pork values closed lower – down $1.59 at $73.91.  The primals were mostly lower all lower – with sharp declines in the loins, picnics, ribs, and hams.  Estimated hog slaughter is 436,000 head – even with last week and up 16,000 on the year.  Saturday’s estimated kill is 86,000 head – up 44,000 on the week and 3,000 on the year.