Market News

Lean hogs higher on short covering

At the Chicago Mercantile Exchange, cattle futures ended the day sharply lower ahead of widespread direct business.  The drop in the limited cash business forced long liquidation selling.  Lower midday box beef also contributed to the day’s lower move.  August live cattle closed $1.57 lower at $108.25 and October contracts closed $1.95 lower at $109.50.  August feeder cattle closed $1.30 lower at $149.35 and September feeder cattle closed $.72 lower at $149.02.

Direct cash cattle trade has improved.  Dressed trade in the north has become increasingly more active and live prices has improved as well.  Live deals have been reported at $110 to $111 – about $5 lower than current asking prices and dressed deals have been between $176 to $179.  Business in the South has yet to develop – that is expected to happen sometime on Friday.

At the Mitchell Livestock Auction in South Dakota, receipts are down significantly on the week and on the year.  Feeder steers and heifers are too lightly tested to make a good market comparison.  Attendance was light due to the limited offering, but demand was moderate to good.  Feeder supply included 37 percent steers and 97 percent of the offering was over 600 pounds.  Medium and Large 1 to 2 feeder steers 621 to 649 pounds brought $166 to $167 and Medium and Large 1 feeder heifers 728 pounds brought $150.75 and feeder heifers 900 to 920 pounds brought $130 to $135.

Boxed beef cutout values closed mixed – firm on Choice and lower on Select on light to moderate demand and moderate offerings.  Choice up $.33 at $206.06 and Select down $.77 at $198.09.  The Choice/Select spread closed at $7.97.   Estimated cattle slaughter is 120,000 head – even on the week and up 3,000 on the year.

Lean hog futures closed higher as contracts were oversold and due for a bounce.  This morning’s strong move in wholesale values was also supportive.  Contracts are discount to cash.  August lean hogs closed $.17 higher at $54.97 and October lean hogs closed $3.00 higher at $51.40.

Cash hogs closed sharply lower again.  It doesn’t seem like the market can find its bottom this month.  Large hog supplies combined with waning demand create an extremely bearish market.  Packer margins have continued to improve.  And early estimates for Saturday’s kill are 139,000 head.  Barrows and gilts at the Iowa/Southern Minnesota closed $1.34 lower with a range of $45 to $46 for a weighted average of $46.04; the Western Corn Belt closed $1.37 lower with a range of $45 to $46 for a weighted average of $46.01; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $1.76 lower with a range of $45 to $46 for a weighted average of $45.93.

Butcher hogs at the Midwest cash markets are $1 to $3 lower at $27 to $36. At Illinois, slaughter sow receipts are up on the week and the year.  Prices are $1 lower at $17 to $31 with light to moderate demand for heavy offerings.  Barrows and gilts are $1 lower at $22 to $36 with light to moderate demand for moderate offerings.

Pork cutout values closed firm – up $.48 at $71.45.  The primals were mixed with the butts, loins, and hams steady to higher.  While the ribs, picnics, and bellies all closed lower. Estimated hog slaughter is 462,000 head – up 12,000 on the week and up 17,000 on the year.