Market News

Cattle futures up ahead of widespread direct business

At the Chicago Mercantile Exchange, both live and feeder cattle futures closed higher on speculative buying interest, largely based on a hope for firmer demand.  August live cattle closed $.35 higher at $108.32 and October contracts closed $.27 higher at $109.  August feeder cattle closed $.12 higher at $149.05 and September feeder cattle closed $.47 higher at $149.15.

Direct cash cattle trade has been quiet.  However, a light scattered trade did develop in parts of the Nort on Tuesday, but it was certainly not enough to establish any kind of trend.  Bids are $108 live and $172 to $173 dressed and asking prices are at $112 to $114 live and $178-plus dressed.  Significant trade volume will likely be delayed until Thursday or Friday – especially with the wide spread between bids and asking prices.

At the Kingsville Livestock Auction in Missouri, receipts were up on the week and the year.  Compared to last week, steer and heifer calves were steady to $5 higher, with the exception being 650 to 700-pound heifers, which traded $6 to $8 higher.  Some of the yearlings were fleshier, but some thin cattle were still available to help buyers push top prices and put together loads.  The USDA says demand was mostly good for a moderate supply.  Strong fundamentals combined with the drought conditions continue to push more cattle to market.  Feeder supply was 58 percent steers and 66 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 500 to 600 pounds brought $171 to $183.25 and feeder steers 700 to 750 pounds brought $149.75 to $165.  Medium and Large 1 feeder heifers 500 to 600 pounds brought $146 to $159.25 and feeder heifers 600 to 700 pounds brought $154 to $165.

Boxed beef cutout values closed mixed – firm on Choice and weak on Select on light to moderate demand and moderate to heavy offerings.  Choice up $.31 at $209.95 and Select down $.66 at $200.61.  The Choice/Select spread closed at $9.34.  Estimated cattle slaughter is 117,000 head – down 3,000 on the week and up 2,000 on the year.

Lean hog futures closed higher despite negative cash fundamentals.  Contracts are oversold and are a bargain buy right now and contracts are at a discount to cash.  October lean hogs closed $.62 higher at $52.47 and December contracts closed $.80 higher at $49.45.

Cash hogs closed weak to lower with strong negotiated numbers for the major direct markets.  Processing margins have jumped into the black while profitability for producers has turned negative.  Hog weights for last week were 277.2 pounds, a 1.2-pound decline from the previous week, but .6 of a pound more than a year ago.  Improved processing margins have packers pushing for larger slaughter runs.  In fact, Saturday’s kill is estimated in the 140,000 head range.  Barrows and gilts at the Iowa/Southern Minnesota are $.41 lower with a range of $41.50 to $43.50 for a weighted average of $42.33; the Western Corn Belt closed $.38 lower with a range of $41.50 to $43.50 for a weighted average of $42.33; the Eastern Corn Belt is $.80 lower with a range of $40 to $43.50 for a weighted average of $42.06; and the National Daily Direct closed $.55 lower with a range of $40 to $43.50 for a weighted average of $42.23.

Butcher hogs at the Midwest cash markets are steady at Dorchester, Wisconsin and Garnavillo, Iowa at $35; Zumbrota, Minnesota is not established; and Red Oak, Iowa is lower at $28. At Illinois, slaughter sow receipts are even on the week and up on the year.  Prices are steady at $20 to $32 with light to moderate demand for moderate offerings.  Barrows and gilts are $1 lower at $19 to $31 with light to moderate demand for moderate offerings.

Pork cutout closed lower – down $1.25 at $68.49.  The primals ended the day mostly lower with the largest declines in the hams and the bellies.  Estimated hog slaughter is 468,000 head – up 6,000 on the week and 19,000 on the year.