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Cattle futures pressured by week’s lower cash trade

At the Chicago Mercantile Exchange, cattle futures closed lower on pressure from weak fundamentals.  This week’s steady to lower cash trade and weakness in beef values were also negative.  The trade is also looking ahead to Friday’s Cattle on Feed report.  October live cattle closed $.60 lower at $116.17 and February live cattle closed $.85 lower at $120.40.  October feeder cattle closed $2.02 lower at $154.70 and November contracts closed $2.12 lower at $154.62.

Direct cash cattle trade ended the week quiet following Thursday’s light to moderate trade activity.  Dressed deals were at mostly $173 to $174, generally $1 to $2 lower than last week’s weighted average basis in Nebraska.  Live trade was at $111, fully steady with last week’s weighted averages.

At the Douglas County Livestock Auction, receipts are steady on the week and down on the year.  Compared to last week, steer and heifers calves were steady to $5 lower and there was no recent test of yearlings for a price comparison.  Demand was good for longtime weaned calves with shots, light demand for unweaned calves with a moderate supply.  Feeder supply included 47 percent steers and 27 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 400 to 500 pounds brought $160 to $170 and feeder steers 600 to 700 pounds brought $156 to $163.50.  Medium and Large 1 feeder heifers 400 to 500 pounds brought $136 to $147.50 and feeder heifers 650 to 700 pounds brought $140 to $146.

At the Iowa Hay Market, good quality hay was lacking.  Buyers were willing to pay for better quality hay and beddings, but availability is limited.  Alfalfa/Grass premium small squares brought $285 and large squares brought $190 to $195.  Good quality small square brought $175, good large squares brought $160 to $185, good large rounds brought $145 to $200.  Grass hay, fair large squares brought $105 to $110 and large rounds brought $90 to $130.

Boxed beef cutout values closed firm on fairly good demand and heavy offerings.  Choice closed $.40 higher at $202.51 and Select closed $.72 higher at $192.49.  Estimated cattle slaughter is 115,000 head – up 7,000 on the week and 8,000 on the year.  Saturday’s estimated kill is 56,000 head – down 1,000 on the week and up 11,000 on the year.

Lean hog futures finished the week mostly lower as support from the cash market is wavering.  Supply and demand concerns linger, especially in the nearby months.  There is also a lot of uncertainty surrounding the long-term impact from the African Swine Fever outbreak in China.  However, the soon to expire October contract closed $.07 higher at $68.70 and the December contract closed $.57 higher at $55.  February lean hogs closed $.20 lower at $62.22.

Cash hogs closed weak with light negotiated purchase totals.  Support in the cash market could be dwindling.  Slaughter runs have been large lately at heavier weights.  That’s bringing a lot of pork into a market that continues to struggle with supply and demand uncertainty.  Barrows and gilts at the Iowa/Southern Minnesota closed $.59 lower with a range of $56 to $62 for a weighted average of $60.65; the Western Corn Belt closed $.61 lower with a range of $56 to $62 for a weighted average of $60.60; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.42 lower with a range of $45 to $62.74 for a weighted average of $61.27.

The USDA says early-weaned pigs were steady.  All feeder pigs were $3.00 per head higher. Demand was moderate for moderate offerings.  Receipts included 44 percent formulated prices.  Total composite formula range was $37 to $44.16 with an average of $40.07.  Total composite cash range was $20.00 to $43 with a weighted average of $34.53.  The average for all early weaned pigs was $37.17 and the average for all feeder pigs was $43.96.

Butcher hogs at the Midwest cash markets are steady at $44.  At Illinois, slaughter sow receipts are up on the week and down on the year.  Prices are $2 higher at $19 to $35 with moderate demand for moderate offerings.  Barrows and gilts were $1 lower at $36 to $44.

Pork cutout values closed higher – up $1.43 at $80.04.  The bellies closed $5.44 higher and there was strength in most of the primals, however , butts closed weak.  Estimated hog slaughter is 459,000 head – down 2,000 on the week and up 2,000 on the year.  Saturday’s estimated kill is 168,000 head – down 13,000 on the year and 42,000 on the year.

 

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