Market News

Livestock futures close lower on outside market weakness

Cattle country remained quiet on Thursday afternoon with trade volume delayed until Friday. Asking prices seem to be around 168.00 to 170.00 in the South and 265.00 to 270.00 in the North. Realistic asking prices are difficult to anticipate given the historically strong basis. Specifically, spot August live closed Thursday nearly 6.00 to 7.00 below Southern business late last week. It is possible some hedgers may be willing to accept lower cash bids if such profitable basis levels can be won. On the other hand carcass value continues to appreciate thanks to solid wholesale beef demand. Processing margins at this point look quite attractive. The kill totaled 115,000 head, the same as last week and 4,000 below last year.

Boxed beef cutout values were steady to firm on moderate demand and light offerings. Choice beef was up .74 at 263.66, and select was .23 lower at 260.60.

Chicago Mercantile Exchange live cattle contracts settled 150 to 260 points lower. Futures struggled, mostly due to pre-cash profit taking and partially due to bearish vibes from outside markets. The stock market was sharply lower. Talk on Wall Street blamed nervousness over European deflation, rising labor costs, and the threat of higher interest rates. The U.S. dollar index is also on the rise, potentially hurting foreign demand for U.S. beef. August settled 1.92 lower at 157.92 and October was down 2.60 at 157.32.

Feeder cattle settled 235 to 300 points lower pressured by the same considerations stated for the defensive tone in the live pit. Perhaps action in the feeder pit had simply become too hot not too cool off. August was 2.35 lower at 220.67, and September was down 3.00 at 221.20.

Feeder cattle receipts at the Huss Platte Valley Auction in Nebraska totaled 1225 head on Wednesday, Compared to two weeks ago, steers over 850 pounds sold 10.00 higher, there were not enough comparable sales of heifers and light steers for a market comparison. Demand was very good from start to finish on all offerings. Feeder steers, medium and large 1 averaging 932 pounds average 224.47 per hundredweight. 906 pound heifers traded at 213.50.

Barrows and gilts in the Iowa/Minnesota direct trade closed .42 higher at 121.49, the West was up .18 at 121.15, and the East was .97 lower at 118.05. Missouri direct base carcass meat price was 1.00 lower at 114.00. Barrows and gilts at Midwest markets were steady to 1.00 lower from 84.00 to 95.00 live

Lean hogs settled unchanged to 112 points lower. Contracts enjoyed a short-covering rally through midsession or so, but selling bias resurfaced into the close. Summer fundamentals remain disappointing with pork demand faltering despite a significant reduction of tonnage on the street. August settle 1.12 lower at 118.02, and October was down .52 at 103.17.

The pork carcass cutout value was down 1.20 at 129.03 FOB plant. The belly primal was over $5.00 lower.

For the week ending July 26, Iowa barrows and gilts averaged 283.7 pounds, 1.1 pounds lighter than the previous week, though still 13.3 pounds heavier than 2013.

Thursday’s hog kill was estimated at 405,000 head, 12,000 more than last week, but 8,000 less than last year.