Market News

Cattle futures higher on limited cash trade

At the Chicago Mercantile Exchange, cattle futures closed moderately higher on support from the limited early-week cash trade.  There is some concern as the industry expects a surge in production to start the next year.  October live cattle closed $.30 higher at $113.97 and December live cattle closed $.52 higher at $119.47.  October feeder cattle closed $.42 higher at $159.07 and November feeder cattle closed $.55 higher at $159.57.

Direct cash cattle trade has been quiet.  There were a handful of deals reported in parts of Iowa and Nebraska at $111 to $112 live.  There were some asking prices noted at $115 live – but bids are still underdeveloped.  Wednesday’s Fed Cattle Exchange has a meager offering of 358 head.  Significant trade volume will likely be delayed until the end of the week.

At the Tri-state Livestock Auction in Nebraska, receipts are up on the week and down on the year.  Compared to last week, lightweight steers were $2 to $6 higher, heavier weight calves were steady with instances of $3 higher.  Heifer calves were unevenly steady on the day and there weren’t enough yearlings for a market test.  The USDA says demand was good for an active market.  Feeder supply included 58 percent steers and 32 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 551 to 599 pounds brought $185 to $193.75 and feeder steers 601 to 643 pounds brought $179 to $187.  Medium and Large 1 feeder heifers 552 to 593 pounds brought $150.50 to $162.75 and feeder heifers 851 to 891 pounds brought $143.50.

Boxed beef cutout values closed weak on light to moderate demand and moderate offerings.  Choice down $.19 at $204.89 and Select down $.65 at $193.98.  The Choice/Select spread closed at $10.91.   Estimated cattle slaughter is 119,000 head – up 1,000 on the week and even on the year.

Lean hog futures closed mixed.  The positive trade news impacted the nearby contract.  While the new USMCA trade deal frees up movement between the three countries, Mexican tariffs on US pork have yet to be lifted.  And there is still a lot of uncertainty in the market as African Swine Fever concerns still linger in China and parts of Europe.  A major disruption to supply could help lift US pork prices.  October lean hogs close d$1.67 higher at $66.42 and December lean hogs closed $.70 lower at $59.15.

Cash hogs closed higher.  Look for an increase in domestic demand this month as October Pork Month is underway.  In addition, the newly agreed to USMCA will also provide some price support.  We’ll keep a close eye on hog weights from the Iowa/Southern Minnesota tomorrow to see just how much impact Hurricane Florence has had, especially as packer facilities have been running at full steam trying to regain some lost ground from the shutdowns.  Barrows and gilts at the Iowa/Southern Minnesota closed $.87 higher with a range of $60 to $64.25 and weighted average of $63.38; the Western Corn Belt closed $.84 higher with a range of $58 to $64.25 for a weighted average of $63.34; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.53 higher with a range of $58 to $64.25 for a weighted average of $63.24.

Butcher hogs at the Midwest cash markets are steady at $40 to $48. At Illinois, slaughter sow receipts are down on the week and up on the year.  Sow prices were steady at $18 to $32 with light to moderate demand for light to moderate offerings.  Barrows and gilts are steady at $37 to $45 with moderate demand for moderate offerings.

Pork cutout values closed weak – down $.57 at $80.48.   The primals were mixed, led by at $4.20 drop in the picnic and a $1.54 decline in the loin.  The hams, butts, ribs, and bellies all closed higher. Estimated hog slaughter is 474,000 head – up 2,000 on the week and up 13,000 on the year.