Market News

Higher grains pressure cattle futures

At the Chicago Mercantile Exchange, live cattle futures closed lower on technical selling.  Feeder cattle traded sharply lower on pressure from the day’s higher moves in both the corn and soybean markets.  August live cattle closed $.75 lower at $107.67 and October live cattle closed $.50 lower at $109.30.  August feeder cattle closed $2.17 lower at $149.32 and September feeder cattle closed $1.77 lower at $149.57.

The direct cash cattle market remains untested.  There are just a few starter bids reported in Texas at $109 to $110 live and $174 dressed.  Some asking prices are being floated at $115 live and $182 dressed.  Significant trade volume isn’t expected to develop until later in the week.

At the Callaway Livestock Center in Missouri, receipts are up on the week and the year.  Compared to last week, steer calves 600 to 650 and 700 to 750 traded firm to $2 higher and yearlings over 750 pounds were scares.  Feeder heifers 400 to 700 pounds were steady to firm.  Feeder supply was 40 percent heifers and 46 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 500 to 600 pounds brought $170.25 to $177.75 and feeder steers 700 to 750 pounds brought $160 to $163.50.  Medium and Large 1 feeder heifers 500 to 600 pounds brought $153 to $160 and feeder heifers 650 to 700 pounds brought $143.50 to $147.85.

Wholesale beef values closed weak on Choice and firm on Select on light to moderate demand and offerings.  Choice down $.45 at $204.27 and Select down $.40 at $198.38.  The Choice/Select spread narrowed to $5.89.  Estimated cattle slaughter is 119,000 head – down 1,000 on the week and up 2,000 on the year.

Lean hog futures continued their collapse as they ended the day mostly lower on pressure from the eroding cash market. With the large hog supply and demand, uncertainty pushed the front-month contract lower.  Weakness in wholesale values is also pressuring prices.  August lean hogs closed $2.17 lower at $61.12 and October contracts closed $.50 lower at $50.72.

Cash hogs ended the day lower. The hog supply is large, and the demand picture is uncertain.  That combination takes the legs out from under the market.  Wholesale values dropped significantly yesterday, and buyers are putting pressure on the large offering of market hogs with sharply lower bids to help relieve some of the pressure on processing margins.

Barrows and gilts at the Iowa/Southern Minnesota are $1.47 lower with a range of $57 to $62.00 for a weighted average of $59.44; the Western Corn Belt closed $1.50 lower with a range of $57 to $62 for a weighted average of $59.45; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $1.46 lower with a range of $57 to $62 for a weighted average of $59.44.

Butcher hogs at the Midwest cash markets are steady at $40.  At Illinois, slaughter sow receipts are down on the week and the year.  Prices are steady at $23 to $36 with light to moderate demand for moderate offerings.  Barrows and gilts are $1 lower at $30 to $44 with moderate demand for moderate offerings.

Pork cutout values closed weak – down $.49 at $74.05.  The primals were mostly higher with strong gains in the hams and picnics.  The bellies closed sharply lower – down $10.26.  Estimated hog slaughter is 448,000 head – down 9,000 on the week and up 5,000 on the year.