Market News

Cattle futures start the week with a bang

The distribution of this week’s cattle showlists is complete and the offering appears to be somewhat smaller than last week. A few early estimates are that ready steers and heifers will be priced around 166.00 to 167.00 in the South and 260.00 plus in the North. The kill totaled 114,000 head, the same as a week ago, but 10,000 smaller than 2013.

Boxed beef cutout values were firm on light to moderate demand and light offerings. Choice beef was up .68 at 249.84, and select was .39 higher at 235.17.

Chicago Mercantile Exchange live cattle contracts settled 150 to 297 points higher. Any market weakness that existed last week quickly evaporated as contracts surged near to limit highs. This helped to set new trading limits in nearby contracts, with the focus still on tight supplies and little emphasis being placed on the ability to sustain boxed beef values. October settled 2.85 higher at 167.90, and December up 2.97 at 168.02.

Feeder cattle ended the session 217 to 295 points higher. Although there remains concern about the sustainability of current price levels through the rest of the year and well into 2015, traders keep coming back to the tight supply argument, which is still able to get the attention of traders. October settled 2.30 higher at 240.75, and November was up 2.67 at 236.82.

Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 10,200 head. Compared to last week, feeder steers and heifers traded mostly steady at mid-session. The quality this week is much more attractive, with several large packages of cattle on offer. Feeder steer calves medium and large 1 weighing 500 to 600 pounds brought 273.50 to 296.00. 500 to 550 pound heifer calves traded from 245.00 to 259.00.

Lean hogs settled unchanged to 1.42 points lower. The early support that trickled into the market in the morning was unable to hold as traders returned to the bearish attitude concerning both cash hog and pork values over the near term. The overall fear of sharply growing supplies through the rest of the year and stretching well into 2015 is creating widespread concerns through the complex. December settled 1.42 lower at 89.15 and February was down 1.15 at 86.40.

Barrows and gilts in the Iowa/Minnesota direct trade closed .86 lower at 97.33 weighted average on a carcass basis, the West was down .84 at 97.27, and the East was .87 lower at 97.03. Missouri direct base carcass meat price was 1.00 to 4.00 lower from 95.00 to 96.00. Midwest hogs on a live basis were steady with an instance of 4.00 lower from 71.00 to 80.00.

The pork carcass cutout value was 4.55 lower at 106.46 FOB plant. The ham primal was over 17.00 lower, and bellies were down nearly 5.00.

The continued focus on the potential to build short and long term hog supplies has created additional longer term market pressure. If PED remains under moderate control through the winter season, it is expected the recent building of breeding herds will continue to keep big supplies readily available during most of 2015.

Hog slaughter was estimated at 429,000 head, 2,000 more than last week and 3,000 less than last year.

 

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