Market News

Boxed beef sharply higher again

Feedlot country was very quiet on Tuesday with buyers and sellers both sitting on their hands. Although packers are considered to be relatively short bought, a lot of push is not expected to accumulate the next round of inventory until Thursday or Friday. Just a few asking prices have been posted in the South at 135.00 or better. The kill was estimated at 112,000 head, 2,000 less than last week, and 4,000 greater than last year.

Boxed beef cutout values were sharply higher on good demand and moderate to heavy offerings. Choice beef was up 3.16 at 208.46, and select was 4.22 higher at 203.34.

Live cattle contracts on the Chicago Mercantile Exchange settled 47 lower to 50 higher. The October contract held on to gains, but the rest of the market ended moderately lower. Firming cash prospects and sharply higher boxed beef cutouts encourage support of the lead contract and the popularity of bull spreading. October settled .50 higher at 132.42, and December was down .37 at 137.20.

Feeder cattle ended the session 32 points higher to 12 lower in light trade volume. While the recent improvement in psychology is encouraging, commercial buying interest remained measured given the persistence of ugly feedlot margins. October was up .32 at 189.70, and November was unchanged at 186.60.

Feeder cattle receipts at the Oklahoma National Stockyards totaled 7,100 head. Compared to last week, feeder steers and heifers were mostly 7.00 to 12.00 higher. Steer calves mostly 15.00 to 20.00 higher, heifer calves under 500 pounds traded 8.00 to 10.00 higher Heifer calves over 500 pounds not well tested. Demand was very good for all classes as buyers were enthused by the strong rally on the CME board last week. Feeder steers medium and large 1 averaging 666 pounds averaged 197.86 per hundredweight. 625 pound heifers brought 194.21.

Lean hogs settled unchanged to 107 points higher. The soon to become lead month, December saw triple digit gains, gaining on both October and the far deferred contracts. Saturday’s kill is expected to be large, perhaps as many as 170,000 head to make up for down time due to mechanical issues at a Smithfield plant. October was up .55 at 74.85, and December settled 1.07 higher at 67.57.

Barrows and gilts in the Iowa/Minnesota direct trade were .99 higher at 72.06 weighted average on a carcass basis, the West was up .97 at 71.78, and nationally the market was 1.45 higher at 70.84. Midwest hogs on a live basis were fully steady from 47.00 to 55.00.

The pork carcass cutout value was .55 higher at 88.92 FOB plant.

Lean hog futures began the week modestly higher, supported in part by expectations that domestic and export demand for pork will be good through the end of the year.

Tuesday’s hog kill was estimated at 431,000 head, 2,000 less than last week, but 2,000 greater than last year.