Market News

Hog futures higher ahead of trade uncertainty

At the Chicago Mercantile Exchange, cattle futures closed mostly higher on buyer interest, ahead of this week’s direct business.  The narrowing Choice/Select spread indicates there is more available Choice beef as demand is falling behind.  August live cattle closed $.45 lower at $106.45 and October contracts closed $.25 higher at $110.10. August feeder cattle closed $.87 higher at $152.80 and September contracts closed $.47 higher at $152.60.

Direct cash cattle trade is extremely quiet ahead of the holiday.  There isn’t much interest in trading any steers and heifers.  A few showlists have been priced at $112 live and $175-plus dressed.  The one lone reported bid is at $170 dressed.  Look for significant trade volume to happen sometime on Thursday or even Friday.

At the Cattlemen’s Livestock Auction in New Mexico, receipts are even on the week and up on the year.  Compared to the most recent auction feeder steers under 600 pounds were $1 to $4 lower and steers over 600 pounds were $9 lower.  The USDA says the trade was active and the demand was good.  Feeder supply included 50 percent steers and 28 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 350 to 400 pounds brought $160 to $165 and feeder steers 550 to 600 pounds brought $154 to $158.  Medium and Large 1 feeder heifers 300 to 400 pounds brought $146 to $155 and feeder heifers 500 to 600 pounds brought $138 to $149.

Boxed beef cutout values ended the day steady on moderate demand and heavy offerings.  Choice ended the day $.08 lower at $211.88 and Select finished $.20 higher at $198.77.  The Choice/Select spread ended at $13.11.  Estimated cattle slaughter is 118,000 head – up 3,000 on the week.

Lean hog futures closed higher in limited volume on short covering ahead of the very uncertain end to this trading week.  The China/US tariff deadline is Friday and if the tariffs are enacted hog markets could be hit hard.  Today’s sharply higher move in carcass values was also supportive.  July lean hogs closed $.52 higher at 483.72 and August contracts closed $1.62 higher at $76.00.

Cash hogs ended the day steady to firm.  This is typically one of the slowest weeks for slaughter totals.  Thanks to the recent stronger moves in carcass values and the limited offering – buyers have had to work a little harder in their procurement efforts.  Hog weights have continued to drop – for the week ending June 30^th they are 277.7 pounds – a 0.3 pound decline from the previous week.  But, the market remains nervous with the large hog supply and the ongoing negative trade talks.  Any disruption to demand would detrimental to US hog producers.  Barrows and gilts at the Iowa/Southern Minnesota closed $.52 higher with a range of $68 to $79.50 with a weighted average of $79.07; the Western Corn Belt closed $.11 higher with a range of $68 to $79.50 for a weighted average of $78.37; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.16 higher with a range of $68 to $79.50 for a weighted average of $77.70.

Butcher hogs at the Midwest cash markets are steady at $52.  At Illinois, slaughter sow receipts are down on the week and the year.  Prices are steady at $34 to $44 with moderate demand for moderate offerings.  Barrows and gilts are steady at $44 to $54 with moderate demand for moderate offerings.

Pork cutout values ended the day lower – down $.85 at $85.80. The primals ended the day mostly lower – led by the drop in the hams, ribs, butts, and loins.  The bellies and the picnics were the only primals to end the day on a positive note.  Estimated hog slaughter is 463,000 head – up 16,000 on the week.