Market News

Hog futures drop on supply concerns

At the Chicago Mercantile Exchange, live cattle futures closed mixed on spread trade.  The markets were pressured from the sharply lower cash trade, but some support from the sharply higher wholesale values.  Feeder cattle futures continued their oversold bounce and were mostly higher on the surging beef values.  October live cattle closed $.02 higher at $98.52 and December live cattle closed $.27 lower at $104.27.  September feeder cattle closed $.47 higher at $133.30 and October feeder cattle closed $.37 higher at $133.75. 

Direct cash cattle trade activity has been relatively quiet this afternoon, but a light live trade was developing in the North at $172.  That’s about $10 lower than last week’s weighted average basis in Nebraska.  There were just a few scattered bids on the table at $105 live and $170 dressed most of the day with asking prices are still around $107 live in the South and $175 in the North.  It looks like the remainder of this week’s business will be delayed until sometime on Friday. A light to moderate trade developed in the South on Wednesday at $105 live, about $5 lower than last week’s weighted average for that area. 

At the Clarinda Livestock Auction in Iowa, receipts were up from the most recent sale.  The USDA says the trade was active.  Feeder supply included 69 percent steers and 82 percent of the auction was over 600 pounds.  Medium and Large 1 feeder steers 803 to 839 pounds brought $134.75 to $138.85 and feeder steers 863 to 866 pounds brought $129.75 to $140.  Medium and Large 1 feeder heifers 562 to 592 pounds brought $135 to $145.75 and feeder heifers 610 to 642 pounds brought $134 to $139.50. 

Boxed beef closed sharply higher on good demand and light offerings.  Choice closed $3.78 higher at $236.12 and Select closed $4.75 higher at $210.67.  The Choice/Select spread closed at $25.45.    Estimated cattle slaughter is 116,000 head – down 5,000 on the week and 4,000 on the year. 

Lean hog futures closed sharply lower on outside pressure and concerns about the long-term supply and demand situation.  October lean hogs closed $1.77 lower at $65 and December lean hogs closed $1.02 lower at $63.74. 

Cash hogs closed higher with strong negotiated purchase totals.  Packers had to work a little harder to move their desired numbers today.   The supply and demand situation continues to drive the market.  The demand picture remains volatile.  But, at the same time, the supply of ready barrows and gilts is more than ample and slaughter runs have yet to take a breather and continue to run well above last year’s numbers.  That just adds more pork to a market that is already saturated.  Barrows and gilts at the Iowa/Southern Minnesota closed $.73 higher for a weighted average of $72.95; the Western Corn Belt closed $1.08 higher for a weighted average of $72.70; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $1.08 higher with a base range of $61 to $73.75 for a weighted average of $71.25. 

At Illinois, slaughter sow prices are steady at $33 to $48 with moderate demand for moderate offerings.  Barrow and gilt prices were firm at $41 to $49 with moderate demand for heavy offerings. 

Pork values closed weak – down $.67 at $88.23.  Picnics, loins, butts, and hams were all lower.  Bellies were firm.  Ribs closed higher.  Estimated hog slaughter is 483,000 head – up 13,000 on the week and 28,000 on the year.