Market News

Surge in corn drives feeder cattle, hogs lower

At the Chicago Mercantile Exchange, live cattle ended the day higher on short covering ahead of widespread direct cash business.  Feeder cattle futures were pressured by the move higher in corn after the USDA adjusted its crop projections for the year.  August live cattle closed $.52 higher at $106.82 and October live cattle closed $.70 higher at $107.85.  August feeder cattle closed $1.70 lower at $138.12 and September feeder cattle closed $1.12 lower at $138.60. 

Direct cash cattle trade activity is at a standstill.  Bids and asking prices are not fully established, although there have been a few starter bids floated in Nebraska at $185.  There were just a handful of deals reported in Nebraska at $182 dressed, but not near enough to establish a trend.  Wednesday’s Fed Cattle Exchange has an offering of 323 head.

At the Callaway Livestock Center in Missouri, receipts are down on the week and the year.  Compared to the most recent sale, steer and heifer calves under 450 pounds sold with a higher undertone on a light test, 450 to 550-pound steers and 450 to 600-pound heifers sold $5 to $10 higher.  Heavier weight steers sold with a higher undertone.  The USDA says demand was good with a moderate supply.  Feeder supply included 62 percent seers and 50 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 550 to 581 pounds brought $160 to $170 and feeder steers 617 to 631 pounds brought $160 to $165.    Medium and Large 1 feeder heifers 450 to 498 pounds brought $148 to $157 and feeder heifers 515 to 547 pounds brought $147 to $156.50. 

Boxed beef closed mixed – firm on Choice and weak on Select on light to moderate demand and offerings.  Choice closed $.73 higher at $222.39 and Select closed $.54 lower at $208.25.  The Choice/Select spread closed at $14.14. Estimated cattle slaughter is 122,000 head – up 2,000 on the week and up 4,000 on the year. 

Lean hog futures tumbled following the surge in corn prices after the USDA’s latest WASDE report and profit taking.  July lean hogs closed $1.82 lower at $84.34 and August lean hogs closed $1.87 lower at $82.97. 

Cash hogs closed firm with strong negotiated purchase totals.  Packers had to dig a little deeper to move their desired numbers.  Supply and demand is the focus of the hog market right now – but it appears the potential increase in demand is stealing the show.  The Administration has made some progress on trade and tariff issues with Mexico and that’s likely to lend support to demand strength.  However, China remains the wild card.  There has been no progress in alleviating pressure to the trade situation with China – but despite tension, the country still is making purchases of US pork.  And the market remains hopeful demand will increase as African Swine Fever continues to spread throughout Asia – stressing the country’s ability to meet its pork and protein needs.    Barrows and gilts at the Iowa/Southern Minnesota had no comparison but had a base range of $73 to $77 for a weighted average of $75.65; the Western Corn Belt had no comparison with a range of $67 to $77 for a weighted average of $75.40; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.60 higher with a base range of $67 to $77 for a weighted average of $75.30. 

Butcher hogs at the Midwest cash markets are steady at $55 and $50.  At Illinois, slaughter sow prices were $1 to $4 lower at $26 to $40 with light demand for heavy offerings.  Barrow and gilt prices were $1 to $3 lower at $47 to $51 with moderate demand for moderate offerings. 

Pork values closed weak – down $.30 at $83.76.  Picnics and loins were lower.  Hams were weak.  Butts, ribs, and bellies were all higher.  Estimated hog slaughter is 478,000 head – up 1,000 on the week and 31,000 on the year.  Monday’s revised slaughter is 471,000. 

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