Market News

Pork values pressure lean hog futures lower

At the Chicago Mercantile Exchange, cattle futures were mostly lower.  Live cattle have been waiting for widespread direct cash business to develop and the USDA’s Cattle on Feed and Inventory reports.  Feeder cattle were lower on position squaring ahead of the reports.  Contracts faced additional pressure from the day’s firm move in corn.  The reports initially look bearish.  August live cattle closed $.02 higher at $108.92 and October live cattle closed $.40 lower at $110.25.  August feeder cattle closed $.77 lower at $153.67 and September feeders closed $.22 lower at $154.55.

A light direct cash cattle trade developed on Friday in parts of the North at mostly $180.  That’s about $6 higher than last week’s weighted average basis in Nebraska.  The South didn’t move many cattle this week.

At the Apache Livestock Auction in Oklahoma, receipts are down on the week and up on the year.  Compared to last week, feeder heifers were $3 higher and heifer calves steady to $4 higher.  The USDA says quality is good to attractive with moderate demand.  The recent hot weather has impacted interest.  Feeder supply is 58 percent heifers and 42 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 510 to 526 pounds brought $160 to $172.50 and feeder steers 581 to 586 pounds brought $163 to $164.50.  Medium and Large 1 feeder heifers 604 to 638 pounds brought $137 to $145.75 and feeder heifers 722 to 740 pounds brought $140 to $147.50.

At the Nebraska Hay Market, alfalfa sold steady, grass hay was steady on a very thin test, and ground and delivered forages and pellets were steady.  The USDA says demand was light to moderate.  Some hay producers are worried they’ve received too much precipitation and have been facing challenges trying to get into fields.  Reports are that second cutting tonnage is better than first cuttings.  In Eastern/Central Nebraska Alfalfa premium large squares brought $200.  Good large squares are $160 and fair to good large round brought $80 to $90.  Premium small square bales brought $160 to $170.  Dehy alfalfa pellets 17 percent protein brought $240.  In the Platte Valley areas, alfalfa good round bales brought $110, ground and delivered alfalfa brought $130 to $140, and dehy alfalfa pellets 17 percent protein brought $210 to $220.  In Western Nebraska alfalfa, premium large squares brought $150, fair to good large squares brought $130 to $135, and sun-cured alfalfa pellets 15 percent protein brought $215 to $230.

Boxed beef cutout values closed steady to weak on light to moderate demand and light offerings.  Choice down $.32 at $204.17 and Select up $.08 at $197.00.  Estimated cattle slaughter is 119,000 head – up 1,000 on the week and 4,000 on the year.  Saturday’s estimated kill is 40,000 head – down 13,000 on the week and up 5,000 on the year.

Lean hog futures were lower, pressured by the sharp move lower at midday from pork.  Demand concerns are ongoing as the negative trade rhetoric continues.  However, the US and Mexico are scheduled for bilateral trade talks next week.  Contracts are at a discount to cash.  The current lean hog contract has lost more than $9 in the last two weeks.  August lean hogs closed $.80 lower at $66.40 and October lean hogs closed $.95 lower at $51.27.Lean

Cash hogs ended the day sharply lower.  Buyers have been successful in moving larger numbers and lower costs all week, ultimately improving processing margins.  The ongoing negative trade rhetoric has the market nervous as demand uncertainties loom. Barrows and gilts at the Western Corn Belt ended the day $2.20 lower with a range of $64 to $69 for a weighted average of $67.06; the National Daily Direct closed $1.18 lower with a range of $64 to $70 for a weighted average of $68.07.  The Iowa/Southern Minnesota and the Eastern Corn Belt were not reported due to confidentiality.

The USDA says early weaned pigs were steady.  All feeder pigs were $2.00 per head higher. The USDA says demand was light to moderate on moderate offerings.  Receipts included 58 percent formulated prices.  Total composite formula range was $21.86 to $44.00 with an average of $35.44.  Total composite cash range was $7.50 to $18.00 with a weighted average of $15.54.  The average for all early weaned pigs was $28.21 and the average for all feeder pigs was $33.96.

Butcher hogs at the Midwest cash markets are $2 lower at $44.  At Illinois, slaughter sow receipts are down on the week and even on the year.  Prices are steady at $26 to $38 with light to moderate demand for moderate offerings.  Barrows and gilts are steady at $40 to $50 with moderate demand for moderate offerings.

Pork cutout values closed sharply lower – down $1.83 at $80.86.  The primals were mostly lower – led by the more than $11 drop in the bellies. Loins and butts did end the day higher.  Estimated hog slaughter is 434,000 head – down 4,000 on the week and up 9,000 on the year.  Saturday’s estimated kill is 148,000 head – up 122,000 on the week and 101,000 on the year.