Market News

Lean hog futures sharply higher on demand potential

At the Chicago Mercantile Exchange, live cattle ended the day mostly higher on support from higher wholesale values.  The signing of the US-Japan trade deal is good news for US beef producers.  Feeder cattle futures were higher on the same factors.  October live cattle closed $.07 lower at $108.17 and December live cattle closed $.35 lower at $110.85.  October feeder cattle closed $.32 higher at $142.02 and November feeder cattle closed $.32 higher at $141.25. 

Direct cash cattle trade remains at a standstill.  There are just a few asking prices noted in parts of the North at $175 dressed.  The South has yet to price cattle today.  Wednesday’s Fed Cattle Exchange has an offering of more than 650 head.  The market is also watching the weather forecast ahead of the first big cold snap. Significant trade volume will likely be delayed until midweek or later. 

At the Tri-State Livestock Auction in Nebraska, receipts are up on the week and the year.  Compared to last week, steer calves under 550 sold $2 to $7 higher, 550 to 600 pounds were steady and over 600 pounds were $5 lower.  Heifer calves were $2 to $3 higher.  There were not enough yearling feeders for a market comparison.  The USDA says demand was moderate to good from a large crowd of mostly order buyers.  The offering was comprised of home-raised bawling calves.  Feeder supply included 57 percent steers and 13 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 500 to 545 brought $156.50 to $168 and feeder steers 553 to 586 pounds brought $154 to $160.  Medium and Large 1 feeder heifers 452 to 499 pounds brought $144 to $153 and feeder heifers 554 to 596 pounds brought $137.50 to $148.75. 

Boxed beef closed higher on moderate demand for light offerings.  Choice closed $2.51 higher at $213.60 and Select closed $1.15 higher at $187.06.  The Choice/Select spread closed at $26.54.   Estimated cattle slaughter is 117,000 head, even on the week and down 3,000 on the year. 

Lean hog futures closed sharply higher ahead of the next round of trade talks with China, higher cash trade, and following the signing of the trade deal with Japan on Monday.  October lean hogs closed $1.20 higher at $61.70 and December lean hogs closed $3.15 higher at $67.40. 

Cash hogs closed sharply higher with very large negotiated purchase totals.  Buyers had to bid up in order to move their desired numbers.   The market continues to look to the potential for a significant demand increase as talks resume with China and following the signing of the trade deal with Japan.  There is still some concern about the extremely large supplies and continued record slaughter runs, but as long as demand for US pork on the global market continues to increase, prices have the potential to move higher.  Barrows and gilts at the Iowa/Southern Minnesota closed $2.39 higher at $52.45; the Western Corn closed $2.35 higher for a weighted average of $52.41; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $2.28 higher with a base range of $45 to $54 for a weighted average of $52.01. 

Butcher hog prices at the Midwest cash markets are steady at $40.  At Illinois, slaughter sow prices are firm at $18 to $30 with moderate demand for moderate offerings. Barrow and gilt prices were firm at $33 to $35 with moderate demand for moderate offerings. 

Pork values ended the day weak – down $.30 at $77.45.  Hams closed sharply lower.  Butts were lower.  Bellies were sharply higher.  Loins, picnics, and ribs were all higher.  Estimated hog slaughter is 489,000 head, down 1,000 on the week and up 37,000 on the year.  Monday’s hog slaughter has been revised to 484,000 head.