Market News

Supply concerns pressure cattle, hog futures

At the Chicago Mercantile Exchange, cattle futures closed lower ahead of the Cattle on Feed report and significant cash business.  Heavy supplies were anticipated, but the report showed placements 5 percent lower, which could provide support to deferred contracts.  The USDA will release Cold Storage numbers on Monday, which will show just how much product is moving.  December live cattle closed $.40 lower at $116.787 and February live cattle closed $.22 lower at $121.15.  November feeder cattle closed $.32 lower at $154.10 and January feeder cattle closed lower at $148.75.

A light direct cash cattle trade was reported on Friday.  The South remained in a standoff with bids at $111 and asking prices holding firm at $112 to $114.  Business wrapped up in the North earlier in the week following the light to moderate trade on Wednesday and Thursday.

At the Valentine Livestock Auction in Nebraska, receipts are up on the week and down on the year.  Compared to last week, steers 450 to 650 pounds were $5 to $10 lower.  There was no comparable offering for heifers.  The USDA says demand was moderate to good with the warmer weather.  Feeder supply included 68 percent steers and 21 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 506 to 543 pounds brought $175 to $185.50 and feeder steers 551 to 595 pounds brought $166 to $177.50.  Medium and Large 1 feeder heifers 502 to 531 pounds brought $156 to $168.50.

At the Nebraska Hay market, compared to last week alfalfa, grass hay ground and delivered products and dehy pellets were steady.  The USDA says demand was moderate with instances of good from out of state buyers.  In Eastern/Central Nebraska alfalfa good large squares brought $176; fair large squares brought $140; premium large rounds brought $115 to $125 and good large rounds brought $84 to $100.  Grass hay premium large rounds brought $100.  Dehy alfalfa pellets 17 percent protein brought $230 to $240.  In the Platte Valley area, Alfalfa good round bales brought $100 to $105, with a few at $110.  Dehy alfalfa pellets 17 percent protein brought $215 to $220.  In Western Nebraska, Alfalfa premium large squares brought $170, good large squares brought $130 ot $150 and good large rounds brought $130 to $135.

Boxed beef cutout values closed higher on moderate to good demand and light to moderate offerings.  Choice up $1.11 at $207.93 and Select up $1.89 at $194.24.  The Choice/Select spread is $13.69.

Estimated cattle slaughter is 115,000 head – even on the week and up 1,000 on the year.  Saturday’s estimated kill is 43,000 head – down 13,000 on the week and 10,000 on the year.

Lean hog futures closed lower on supply and demand concerns.  There’s a lot of pork coming down the pipeline.  The African Swine Fever situation in China continues to provide some hope, but the uncertainty is preventing the market from shoring up any support to move positive.  December lean hogs closed $.70 lower at $51.60 and February lean hogs closed $1.20 lower at $59.02.

Cash hogs closed weak with moderate negotiated purchase numbers.  The supply and demand woes continue.  Hog weights have been heavier and that, combined with the large slaughter runs, is putting more pork into a market that is battling demand certainty.  African Swine Fever continues to be a concern and Europe and China are in an ongoing battle with the disease.  Should it become a major disruption to supply there, it would be supportive to US pork prices.  Barrows and gilts at the Iowa/Southern Minnesota closed $.30 lower with a range of $52 to $59 for a weighted average of $58.50; the Western Corn Belt closed $.41 lower with a range of $52 to $59 for a weighted average of $58.36; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.44 lower with a range of $52 to $59.37 for a weighted average of $58.72.

The USDA says early-weaned pigs were $1.00 per head higher.  All feeder pigs were steady to weak on light receipts. Demand was moderate on moderate offerings.  Receipts included 60 percent formulated prices.  Total composite formula rage was $37 to $52.50 with an average of $41.19.  Total composite cash range was $26.00 to $42 with a weighted average of $36.12.  The average for all early weaned pigs was $39.32 and the average for all feeder pigs was $41.21.

Butcher hogs at the Midwest cash markets are steady at $42.  At Illinois, slaughter sow receipts are up on the week and the year.  Prices are $2 higher at $25 to $40 with moderate demand on moderate offerings.

Pork cutout values are firm up $.30 at $78.42.  The ribs and picnics were sharply higher.  Butts and hams were steady, loins firm, and bellies were weak.  Estimated hog slaughter is 464,000 head, up 5,000 on the week and 9,000 on the year.  Saturday’s estimated kill is 235,000 head – up  67,000 on the week and 47,000 on the year.