Market News

Hog slaughter running ahead of last year

It was very quiet in feedlot country on Monday afternoon with bids and asking prices not fully defined. New showlists appear to be mixed, larger in Kansas, Texas and Colorado, but smaller in Nebraska. Significant trade volume may not develop until the second half of the week. But some packers are very close to the knife and we could see some scattered trade earlier in the week. The kill totaled 112,000 head, even with last week, but 4,000 more than a year ago.

Boxed beef cutout values were sharply lower on light demand and moderate offerings. Choice beef was down 2.33 at 251.41, and select was 2.44 lower at 244.79.

Chicago Mercantile Exchange live cattle contracts settled 50 points higher to 60 lower. Cattle futures were pressured throughout the session, but aggressive triple digit losses eased by midday. Traders sought additional support from outside markets, but it appeared selling activity slowed, and late day short covering sparked some additional interest. February settled .52 lower at 149.82, and April was down .80 at 148.00.

There was aggressive pressure in the feeder cattle futures earlier in the session, but they did manage to close off the day’s lows. Some buyers stepped back into the market, but the lack of activity created softness through the market. January settled 2.05 lower at 211.65, and March was down 1.85 at 199.97.

Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 8500 head. Compared to last week, feeder steers and heifers opened 10.00 to 15.00 lower. Steer and heifer calves were mostly weak in a very light test. The market was pressured by lower feeder futures and last week’s lower feedlot market. Yearling steers weighing 600 to 650 pounds traded from 228.25 to 236.00. A package of 620 pound yearling heifers brought 208.00 per hundredweight.

Lean hogs settled 152 to 230 points higher. Early week gains quickly developed through the lean futures. The pressure in the cattle market seemed to be the main draw for traders looking for a place to park investments for the short term. Significantly higher pork cutout values at midday were also supportive to futures. February settled 1.52 higher at 70.82, and April was up 2.00 at 72.65.

Hog slaughter last week totaled 2.316 million head, up 2.6% from the week before and up 4.6% from the same week last year. This was the biggest slaughter week since the week before Christmas 2013. Further, such data threatens to exceed even the bearish implication of the market hog weight breakdown contained in the December inventory.

Barrows and gilts in the Iowa/Minnesota direct trade closed .54 lower at 68.44 weighted average on a carcass basis, the West was down .83 at 68.03, but the East was up 1.64 at 67.86. Missouri direct base carcass meat price was down 2.00 from 60.00 to 64.00. Barrows and gilts at Midwest markets were steady with an instance of a 1.00 to 2.00 lower from 42.00 to 50.00 on a live basis.

The pork carcass cutout value was up .09 at 89.47 FOB plant.

Monday’s hog kill was estimated at 435,000 head, 39,000 more than last week and 31,000 greater than 2014.