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Cattle futures lower ahead of widespread direct business

Chicago Mercantile Exchange live cattle futures were sharply lower on long liquidation and slow beef demand as traders prepared for the week’s widespread direct cash business. June was $1.67 lower at $106.25 and August was down $2.02 at $101.87.

Feeder cattle were sharply lower on the same factors as the live pit. Losses were somewhat limited by the lower corn. August was down $1.97 at $143.67 and September was $1.87 lower at $144.80.

Direct cash cattle markets mostly stayed at a standstill, aside from very light trade in Iowa and Nebraska mainly at $176 to $180 dressed, with a few live sales in Nebraska at $110. Asking prices Thursday afternoon were $117 live and $186+ dressed, with bids of $110 live and $178 to $180 dressed. Overall, packer inquiry stayed generally light, so widespread business will wait until Friday. Both sides will continue to watch the futures and wholesale markets. The available numbers should continue to expand over the next several weeks, but some of that impact could be lessened by lighter average live weights.

Boxed beef closed lower on light to moderate demand for moderate to heavy offerings. Choice was down $1.82 at $222.08 and Select was $.33 lower at $201.97. The estimated cattle slaughter of 116,000 head was down 5,000 on the week and 3,000 on the year.

At the Mitchell Livestock Auction feeder cattle sale in South Dakota, compared to the previous week, steers weighing more than 800 pounds were mostly steady and heifers weighing more than 850 pounds were steady with a firm undertone. The USDA says flesh condition ranged from light to moderate plus, mostly moderate, and the offering was average to attractive, with good activity. Medium and Large 1 feeder steers weighing 900 to 1,000 pounds sold at $126.50 to $131 and Large 1 feeder steers weighing 1,000 to 1,100 pounds were reported at $116 to $123. Medium and Large 1 feeder heifers weighing 850 to 900 pounds brought $120.50 to $128.10 and 900 to 1,000-pound heifers ranged from $114 to $120.

Lean hog futures were mostly sharply lower, with all contracts except for the now expired June down on profit taking and overbought signals. June expired at $81.17, up $.17, while July was down $1.15 at $81.62 and August was $1.05 lower at $78.60.

Cash hogs were steady to higher, with mostly moderate closing negotiated numbers at the major direct markets. Most buyers raised bids again after Wednesday’s higher bids moved no better than moderate negotiated numbers. Market ready numbers are tighter, and packers are short bought, with narrowing processing margins as cash prices appreciate at a faster rate than wholesale prices. Domestic pork demand has been good, but there’s a lot of uncertainty about longer term export demand because of tensions with some of the United States’ biggest trading partners. The USDA’s quarterly hogs and pigs report is out on the 28th.

Pork closed $.71 higher at $82.40. Ribs were firm, picnics were sharply higher, and bellies jumped $4.56. Loins, butts, and hams were modestly lower. The estimated hog slaughter of 443,000 head was down 2,000 on the week, but up 10,000 on the year.

Iowa/Southern Minnesota direct barrows and gilts closed $1.61 higher at $75 to $85 with a weighted average of $83.35, the Western Cornbelt was up $1.60 at $75 to $85 for an average of $83.24, and national direct business was $.92 higher at $75 to $85 with an average of $81.86. Butcher hogs at the Midwest cash markets were steady to $2 higher at $50 to $53. Missouri direct butchers were steady to $1 higher at $62 to $63 on light to moderate supply and demand. Sows were steady at $28 to $40. Illinois direct sows were $2 higher at $32 to $38 on moderate demand and offerings. Barrows and gilts were $2 higher at $50 to $58 with moderate demand and offerings. Boars ranged from $8 to $25.

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