Market News

Hog futures supported by strong cash trade

At the Chicago Mercantile Exchange, cattle futures clawed their way back to bounce off session lows.  Except for the nearby contract, live cattle closed mostly higher.  The lack of direction in the cash market, tighter packer margins, and expanding available numbers create market uncertainty.  June live cattle closed $.12 lower at $108.52 and August live cattle closed $.12 higher at $104.30.  August feeder cattle closed $.15 lower at $145.80 and September contracts closed $.42 lower at $146.82.

Direct cash cattle trade was fairly quiet.  There were a few scattered bids in parts of the North at $180 and the only asking prices reported in the South at $117-plus.   It looks like significant trade volume will be delayed until the latter part of the week.

At the Callaway Livestock Center, receipts are down on the week and up on the year.  Lightweight steer calves were steady, 6-weight steers were lightly tested, 700 to 750-pound steers were steady to $3 higher, and yearling steers over 800 pounds were steady.  Lightweight feeder heifers were steady to $3 lower and heifers over 600 pounds were steady to firm.  The USDA says demand was moderate to good with moderate supply.  Feeder supply included 53 percent steers and 52 percent of the offering is over 600 pounds.  Medium and Large 1 feeder steers 550 to 600 pounds brought $162 to $176.50 and steers 700 to 725 pounds were $150 to $158.25.  Medium and Large 1 feeder heifers 500 to 600 pounds brought $140 to $150 and feeder heifers 745 to 800 pounds brought $130.75 to $136.

Boxed beef closed mixed on moderate demand and light offerings.  Choice down $.21 at $224.92 and Select closed $.59 higher at $203.39.  The Choice/Select spread closed at $21.53.  Estimated cattle slaughter is 120,000 head – down 1,000 on the week, but up 2,000 on the year.

Lean hog futures closed higher on short covering following Monday’s losses in light trade volume.  Strong moves higher in the cash market and recent strength in pork values has also provided some support.  June lean hogs closed $.37 higher at $80.52 and July contracts closed $2.05 higher at $81.45.

Cash hogs closed higher.  Tighter supplies have had the market on a roll and it’s expected to continue for the next few weeks.  While pork processing margins are still in the black, they have been narrowing as the cost of inventories is on the rise.  Slaughter runs have continued to slow with Saturday’s estimated kill just 25,000 head.  Of course, it goes without saying, there are still large supplies of hogs, and the market is nervous as the ongoing trade talks, with some of the largest US trading partners, don’t seem to have an end in sight.  Barrows and gilts at the Iowa/Southern Minnesota closed $1.11 higher with a range of $72 to $81 for a weighted average of $80.09; the Western Corn Belt closed $1.02 higher with a range of $72 to $81 for a weighted average of $79.97; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct is $.78 higher with a range of $72 to $81 and a weighted average of $78.68.

Butcher hogs at the Midwest cash markets are $1 to $6 higher at $50 to $51.  At the Interior Missouri Direct, receipts are down on the week and the year.  Barrows and gilts are steady to $2 higher at $62 with light to moderate supply and demand.  Sows are steady at $28 to $40.  At Illinois, slaughter sow receipts are even on the week and down on the year.  Prices are $2.00 higher at $30 to $42 with moderate demand for moderate to heavy offerings.  Barrows and gilts are $1 higher at $49 to $55 with moderate demand for moderate offerings.

Pork cutout values closed higher – up $.86 at $81.30.  The primals were mostly higher led by the rib, bellies, picnic, and hams.

Estimated hog slaughter is 452,000 head, down 1,000 on the week, but up 19,000 on the year.