Market News

Hog futures surge on higher wholesale values

At the Chicago Mercantile Exchange, live cattle futures closed higher on late in the day buyer support. Today’s surge in hog futures also spilled over into the cattle complex.  Wholesale values have been mixed, but the strength in the Choice cuts is also adding support.  October live cattle closed $1.05 higher at $113.47 and December live cattle closed $1.80 higher at $117.97.  October feeder cattle closed $.40 higher at $155.10 and November contracts closed $.60 higher at $155.22.

Direct cash cattle trade is starting the week in its typical fashion with bids and asking prices not yet established.  This week’s showlists appear to be mixed – larger in Nebraska, about steady in Texas and Colorado, but lower in Kansas.  Significant trade volume will likely be delayed until the latter half of the week.

At the close, at the Oklahoma National Stockyards, receipts are down on the week and the year.  Compared to last week, all classes of feeder cattle and calves were lightly tested.  Feeder steers under 800 pounds were $1 to $3 lower and the few over 800 pounds were firm.  Heifers were $3 to $6 lower.  The USDA says demand was moderate and quality was plain to average.   Heavy rainfall across the state continues to pressure livestock movement and excessive mud continues to be a problem at feedyards.  Feeder supply included 54 percent steers and 47 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 610 to 645 pounds brought $152 to $162 feeder steers 710 to 743 pounds brought $154.50 to $158.25.  Medium and Large 1 feeder heifers 501 to 542 pounds brought $135 to $144.50 and feeder heifers 650 to 676 brought $140 to $147.50.

Boxed beef cutout closed mixed.  Sharply higher on Choice and weak on Select on light to moderate demand and offerings.  Choice up $2.09 at $204.80 and Select closed $.39 lower at $191.89.  Estimated cattle slaughter is 119,000 head – up 5,000 on the week and 8,000 on the year.

Lean hog futures closed higher on technical buying and support from wholesale values.  More concerns about African Swine Fever are also helping elevate prices.  December lean hogs closed $1.75 higher at $56.76 and February lean hogs closed $1.67 higher at $63.90.

Cash hogs closed weak with solid negotiated purchase numbers.  We continue to monitor hog weights as slaughter runs have been large recently.  The combination adds a lot of pork into a market that is struggling with demand uncertainties.  While the trade agreement with Canada and Mexico has been agreed to – it still needs to clear regulatory hurdles and Mexico has yet to drop its 20 percent tariff on US pork.  It is also unclear how much impact the African Swine Fever outbreak in China has had on the global market.  Barrows and gilts at the Iowa/Southern Minnesota closed $.60 lower with a range of $55 to $61.25 for a weighted average of $59.98; the Western Corn Belt closed $.58 lower with a range of $55 to $61.25 for a weighted average of $59.96; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $1.07 lower with a range of $55 to $61.40 for a weighted average of $60.33.

Butcher hogs at the Midwest cash markets are steady to $2 lower with $40 and $42.  At Illinois, slaughter sow receipts are down on the week and the year.  Prices are $2 higher at $24 to $37 with moderate demand for moderate offerings.  Barrow and gilt prices are $1 lower at $35 to $43 with moderate demand for moderate offerings.

Pork cutout values are higher – up $1.46 at $81.50.  The hams, bellies, butts, and picnics are all sharply higher, loins were steady, and ribs were lower.  Estimated hog slaughter is 459,000 head – down 14,000 on the week and up 14,000 on the year.