Market News

Hog futures up on short covering

Chicago Mercantile Exchange live cattle futures were sharply lower on technical selling, long liquidation, and position squaring ahead of the USDA’s Cattle on Feed report. The on-feed numbers were bearish, but very close to what analysts were expecting, and nearby live cattle contracts are at a discount to the most recent round of direct cash business, probably limiting some of the negativity. August was $1.70 lower at $106.25 and October was down $2.02 at $106.70.

Feeder cattle were mostly sharply lower on spread trade involving the August contract, in addition to the same factors as the live pit. August was the only contract in the black, up $.17 at $149.20 and September was down $1.67 at $147.47.

Direct cash cattle markets were at a standstill. Widespread business was wrapped up after light to moderate trade earlier in the week. The bulk of Thursday’s activity was in the South, mostly at $109 live, down $1 to $1.50 on the week, with lighter trade in the North mainly at $173 dressed, generally steady with Wednesday and the previous week. What was left on the showlist Friday afternoon was priced around $110 live and $175 dressed, which could be the starting point for the coming week.

Boxed beef closed lower on light to moderate demand for light offerings. Choice was down $1.05 at $213.32 and Select was $.17 lower at $203.82. The estimated cattle slaughter of 113,000 head was down 6,000 on the week and 2,000 on the year.

For the week in Oklahoma feeder steers were mostly steady to $1 lower and heifers were steady to $6 higher. The USDA says demand was moderate for all classes, with 61% of the supply weighing more than 600 pounds and 60% of the offering steers. Medium and Large 1 feeder steers weighing 700 to 800 pounds ranged from $132 to $158 and 800 to 900-pound steers sold from $124 to $150. Medium and Large 1 feeder heifers weighing 600 to 700 pounds brought $128 to $158 and 700 to 800-pound heifers were reported at $121 to $148.75.

In Iowa, the USDA says prices were lower, but because of poor quality hay and straw, much of which was baled while wet. Better quality supplies were brought in from other states. Premium quality large squares of alfalfa were reported at $205 to $270 with good large squares at $155 to $175. Premium small squares of grass brought $200 to $240 with good large squares at $125 to $160 and large rounds at $105 to $170. Good large squares of oat hay were pegged at $135, while large squares of oat straw ranged from $110 to $150, with large rounds at $85 to $90.

For Missouri, hay supplies are tight with very good demand and steady to firm prices. Recent rainfall in parts of the state has improved pasture conditions, but most of Missouri remains in a drought. Large rounds of supreme quality alfalfa sold at $180 to $250 with premium at $160 to $200. Good quality mixed grass hay brought $100 to $200 with fair to good at $80 to $150. Good quality Bromegrass ranged from $120 to $150.

Nebraska reports alfalfa, grass hay, ground and delivered alfalfa, and dehydrated pellets were steady with a higher undertone when compared to the previous week. The USDA says demand and movement were strong, especially in the areas closest to drought, and most producers have started their third cutting. In eastern/central Nebraska, fair quality large squares of alfalfa were pegged at $140, with premium large rounds at $150 delivered. Good large squares of grass hay sold at $$150 delivered and 17% protein dehydrated alfalfa pellets were reported at $230 to $240. For the Platte Valley, premium large rounds of alfalfa sold at $110, with good quality at $100 to $105. Ground and delivered alfalfa ranged from $140 to $145, with alfalfa/cornstalk mix at $125 to $130 and cornstalks at $90 to $115. 17% protein dehydrated pellets came out at $210 to $220. In western Nebraska, good large squares of alfalfa sold at $150 to $160, while good round bales brought $150. Ground and delivered alfalfa brought $150 to $185 and 15% protein sun-cured alfalfa pellets were pegged at $235.

Lean hog futures were supported by short covering and not a whole lot else. Bear spreading was an additional feature, helping deferred contracts outgain nearby months. The trade continues to grapple with a lot of demand uncertainties, plenty of available market ready numbers, and a premium to the cash index. October was up $.60 at $51.77 and December was $.35 higher at $51.22.

Cash hogs were lower, with light closing negotiated numbers for the major direct hog markets. Many buyers apparently had the needed numbers in hand after a very aggressive week of procurement. Estimates for Saturday’s slaughter climbed as the week went on, with the USDA projecting the kill at 216,000 head, as the trade expected to apply further leverage ahead of a slowdown in chain speed for Labor Day weekend. If realized, that would bring the week to date total to 2.526 million head, an increase of 2.8% on the year. The industry is watching NAFTA talks with Mexico and the spread of African Swine Fever in China. The week’s round of tariff discussions with China failed to make any apparent public progress.

Pork closed $.67 lower at $64.18. Picnics were down, while loins and bellies were sharply lower. The estimated hog slaughter was 456,000 head, up 19,000 on the week and 29,000 on the year.

Iowa/Southern Minnesota direct barrows and gilts closed $.22 lower at $34 to $37.50 with a weighted average of $37, the Western Cornbelt was down $.17 at $34 to $37.50 for an average of $37.05, and national direct business was $.20 lower at $34 to $37.50 with an average of $37.06. Butcher hogs at the Midwest cash markets were $2 lower at $25. Illinois direct sows were steady at $16 to $31 on light to moderate demand for moderate offerings. Barrows and gilts were steady at $17 to $29 on light to moderate demand for moderate offerings. Boars ranged from $5 to $15.

The USDA reports early weaned pigs and all feeder pigs were $1 higher with moderate demand and offerings. The total composite formula range for early weaned pigs was $21.77 to $44 with a weighted average of $34.01 and the total composite cash range was $13 to $24 with an average $18.23, while the weighted average for all early weaned pigs was $26.16. The total composite cash range for feeder pigs was $15.50 to $26 for an average of $18.80.