Market News

Hog futures mostly lower on supply concerns

At the Chicago Mercantile Exchange, cattle futures ended the day mostly higher in choppy trade.  There is support from higher beef values due to speculation Hurricane Florence may reduce pork availability.  October live cattle closed $.27 lower at $113.42 and December live cattle closed $.05 higher at $118.10.  September feeder cattle closed $.10 lower at $157.32 and October contracts closed $.30 higher at $159.17.

Direct cash cattle trade is mostly at a standstill, however, there were a few deals done in Nebraska at $111.50 live.  This week’s showlists appear to be larger in Texas, Kansas, and Nebraska, but lower in Colorado.  Bids and asking prices are not developed and significant trade volume isn’t expected until the latter half of the week.

At Oklahoma National Stockyards, receipts are up on the week and the year.  Compared to last week, feeder steers and heifers are $3 to $6 higher, 500 to 600 pounds calves $2 to $5 higher, lighter calves were not well tested.  The USDA says demand was good to very good and the quality was average to attractive.  Feeder supply included 56 percent steers and 64 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 653 to 692 pounds brought $155 to $170 and Medium and Large 1 feeder heifers 607 to 648 pounds brought $150 to $167.50.

Boxed beef cutout values closed higher on strong demand and moderate offerings.  Choice up $1.77 at $206.04 and Select up $.91 at $197.38.  The Choice/Select spread is $8.66. Estimated cattle slaughter is 119,000 head – even on the week and up 8,000 on the year.

Lean hog futures closed mostly lower on concerns about a disruption to the hog supply.  While we saw declines in production last week, once processing facilities resume business we could be looking at heavier weights and ultimately more pork entering an already saturated market.  October lean hogs closed $.22 higher at $56.40 and December lean hogs closed $1.27 lower at $55.37.

Cash hogs closed sharply higher.  There will be a lot of focus on the damage from Hurricane/Tropical Storm Florence.  Plants shut down last week in advance of the storm and some parts of North Carolina received up to 2 feet of rainfall.   Smithfield has reported processing facilities were undamaged and are operational, but production schedules have not been announced.  The industry also continues to monitor the African Swine Fever situation in China.  Barrows and gilts at the Iowa/Southern Minnesota closed $2.74 higher with a range of $43 to $54 for a weighted average of $51.67; the Western Corn Belt closed $2.78 higher with a range of $43 to $54 for a weighted average of $51.58; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $1.80 higher with a range of $43 to $54 for a weighted average of $50.59.

Butcher hogs at the Midwest cash markets are steady to $4 higher at $32.  At Illinois, slaughter sow receipts are up on the week and down on the year.  Prices are steady at $16 to $29 with light to moderate demand for moderate offerings.  Barrows and gilts are $2 higher at $26 to $36 with moderate demand for moderate offerings.

Pork cutout values closed sharply higher – up $1.49 at $76.02.  The primals were mostly higher, led by the picnics, bellies, ribs, and hams.  Butts were weak, and loins were firm.  Estimated hog slaughter is 416,000 head – down 43,000 on the week and 32,000 on the year.