Market News

Hog futures supported by strong wholesale values

At the Chicago Mercantile Exchange, live cattle futures closed mostly lower, unable to find support in the cash trade’s strong finish last week.  Beef supply worries are adding pressure to deferred contracts.  Feeder cattle were mixed, finding some support in Monday’s weak corn trade. December live cattle closed $1.15 lower at $117.25 and February live cattle closed $.65 lower at $122.80.  November feeder cattle closed $.90 lower at $153.90 and January feeder cattle closed $.12 higher at $149.82.

Direct cash cattle trade started the week quiet.  This week’s showlists appear to be mixed – higher in Nebraska and Colorado, steady in Kansas, but lower in Texas.  There’s some hope last week’s momentum will carry over into this week.  Don’t look for significant trade volume to develop before mid-week at the earliest.

At Mid-Session at the Oklahoma National Stockyards, receipts are up on the week and the year.  Compared to last week feeder steers are uneven – those over 800 pounds are steady to $2 higher and steers under 800 pounds are steady to $3 lower.  Feeder heifers are steady to $3 higher.  Demand is moderate to good for feeder cattle and steer and heifer calves.  However, buyers have been more selective for kind and condition.  Feeder supply included 85 percent steers and 14 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 550 to 594 pounds brought $143 to $170 and feeder steers 702 to 725 pounds brought $149 to $159.50.  Medium and Large 1 feeder heifers 564 to 588 pounds brought $144 to $149 and feeder heifers 655 to 699 pounds brought $140 to $152.50.

Boxed beef cutout values closed firm on Choice and sharply higher on select on light to moderate demand and offerings.  Choice closed $.29 higher at $213.79 and Select closed $2.28 higher at $201.11.  The Choice/Select spread closed at $12.65.   Estimated cattle slaughter is 117,000 head – down 1,000 on the week and even on the year.

Lean hog futures closed higher, building on last week’s gains.  Wholesale values at midday along with the lighter than expected production is providing price support.  In addition, concerns about African Swine Fever in China continues help keep prices supported.  The market is anticipating a major disruption to the global pork supply, forcing China to import more product and ultimately providing support to US pork prices. December lean hogs closed $.92 higher at $58.50 and February lean hogs closed $.52 higher at $66.90.

Cash hogs closed higher with moderate negotiated purchase totals.  The cash market turned around this afternoon.  There’s been more competition for hogs and buyers had to dig a little deeper to move numbers this afternoon.  There some thought that China is unable to control the outbreak of African Swine Fever and that has the potential to disrupt the global pork supply.  If that happens, while not directly, it would be largely supportive to US pork prices.  Barrows and gilts at the Iowa/Southern Minnesota closed $.48 higher with a range of $52 to $59 for a weighted average of $58.41; the Western Corn Belt closed  $.86 higher 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 $.27 higher with a range of $51 to $59 for a weighted average of $57.60.

Butcher hogs at the Midwest cash markets are steady in Zumbrota, Minnesota at $37 and $3 to $6 higher at $44 in Dorchester, Wisconsin and Garnavillo, Iowa.  At Illinois, slaughter sow receipts are up on the week and the year.  Prices are $1 to $2 higher at $31 to $45 with moderate demand and moderate offerings.  Barrows and gilts were $1 lower at $31 to $40 with moderate demand for moderate offerings.

Pork cutout values closed higher – up $.93 at $77.52.  The bellies, ribs, hams, and butts were all higher to sharply higher.  Picnics were firm.  Loins were lower.  Estimated hog slaughter is 474,000 head – down 1,000 on the week and up 30,000 on the year.