Market News

Cattle futures mostly lower ahead of on feed numbers

At the Chicago Mercantile Exchange, cattle futures closed mostly lower with narrow trading ranges in light activity.   Contracts were also pressured by weak wholesale values and the lack of direction from the cash trade.  Early estimates for Friday’s Cattle on Feed report show another jump in on-feed numbers, which will likely force a price adjustment in the next few days.  October live cattle closed $.12 lower at $113.10 and December live cattle were unchanged at $117.97.  September feeder cattle closed $.30 lower at $155.52 and October feeder cattle closed $.15 lower at $157.98.

Direct cash cattle trade remains slow with just a few scattered bids noted in parts of Nebraska and Texas at $108.  Asking prices are around $113 to $114 live and $180-plus dressed.  Significant trade volume will likely be delayed until Thursday or Friday.

At the Bloomfield Auction in Iowa, there was no comparison, but the yearling sale traded active with moderate to good demand.  Feeder supply included 55 percent steers and 97 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 700 to 750 pounds brought $166 to $172.25 and feeder steers 800 to 850 pounds brought $153.25 to $161.  Medium and Large 1 feeder heifers 650 to 700 pounds brought $158 to $160 and feeder heifers 700 to 750 pounds brought $151 to $156.10.

Boxed beef cutout values closed lower on light to moderate demand and moderate to heavy offerings.  Choice down $1.04 at $204.25 and Select closed $1.29 lower at $194.18.  The Choice/Select spread closed at $10.07. Estimated cattle slaughter is 119,000 head – even on the week and up 2,000 on the year.

Lean hog futures closed mixed in a narrow trading range as supply concerns loom following Hurricane Florence.  Processing facilities are still running at a reduced speed, once it resumes at full capacity, hog weights will likely be higher and more meat will enter a market that is already saturated.  October lean hogs closed $.82 higher at $60 and December contracts closed $.07 lower at $57.90.

Cash hogs closed sharply higher with solid negotiated purchase totals.  This week’s lower hog weights and higher receipts were likely a combination of buyers pulling numbers ahead following the shortened holiday week and in advance of Hurricane Florence making landfall.  Smithfield says there has been no major damage to processing facilities in the state of North Carolina and they are running again, but it is at limited capacity.  Production will ramp up as roads become passable.  Once production resumes, supply and demand issues will likely return as hogs will be at heavier weights and will add more meat to an already saturated market.  The industry is also watching as African Swine Fever has continued to spread.  Barrows and gilts at the Iowa/Southern Minnesota closed $3.38 higher with a range of $45 to $59 for a weighted average of $57.29; the Western Corn Belt closed $3.30 higher with a range of $45 to $59  for a weighted average of $57.21; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $3.15 higher with a range of $45 to $59 for a weighted average of $56.21.

Butcher hogs at the Midwest cash markets are steady at $32 to $34.  At Illinois, slaughter sow receipts are up on the week and down on the year.  Prices are $1 higher at $16 to $29 with light to moderate demand for moderate offering.  Barrows and gilts are $3 higher at $29 to $38.

Pork cutout values closed higher – up $.82 at $78.39.  The primals were mostly higher led by the hams and the picnics.  The bellies were the only primal to end the day lower.

Estimated hog slaughter is 434,000 head – up 24,000 on the week and down 23,000 on the year.