Market News

Cattle, hogs pressured by demand uncertainty

At the Chicago Mercantile Exchange, live cattle futures closed lower after Friday’s somewhat disappointing cash trade.  Cattle buying interest could be limited ahead of the holiday.  Feeder cattle futures closed sharply lower on profit taking and demand uncertainty.  The market is also looking ahead to this week’s reports – we’ll see Cattle on Feed, Livestock Slaughter, and Cold Storage before the week’s end.  February live cattle closed $.85 lower at $121.55 and April live cattle closed $.65 lower at $123.85.  January feeder cattle closed $2.20 lower at $145.37 and March feeder cattle closed $2.45 lower at $143.32.

Direct cash cattle trade is quiet.  Today has been focused on the collection and distribution of new showlists which appear to be much smaller compared to last week.  We’ll see livestock slaughter, cattle on feed, and cold storage reports all coming out in the second half of the week, and it’s likely significant trade volume will be delayed until after those numbers are released.

At midsession at the Oklahoma National Stockyards, receipts are up on the week and the year.  Compared to last week’s lighter test, feeder steers were steady to $3 higher.  Feeder heifers were steady to slightly lower on a limited test.  Steer calves were mostly $2 to $6 higher.  Heifer calves were $1 higher on a light test.  Feeder supply included 53 percent steers and 60 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 602 to 626 brought $144 to $155 and feeder steers 658 to 699 pounds brought $140 to $146.50.  Medium and Large 1 feeder heifers 603 to 648 pounds brought $130 to $137.50 and feeder heifers 700 to 729 pounds brought $134.50 to $137.

Boxed beef closed firm to higher on moderate to good demand and light to moderate offerings.  Choice up $1.71 at $212.67 and Select closed $.62 higher at $203.76.  The Choice/Select spread ended the day at $8.91.    Estimated cattle slaughter is 108,000 head – down 11,000 on the week and 10,000 on the year.

Lean hog futures closed lower pressured by weaker cash trade and continued demand uncertainty.  Contracts are at a premium to cash.   And the market is still looking ahead to Thursday’s Hogs and Pigs report, Livestock Slaughter, and Friday’s Cold Storage numbers.  February lean hogs closed $.67 lower at $63.82 and April lean hogs closed $1.07 lower at $68.97.

Cash hogs closed weak with moderate negotiated purchase totals.  This is the last full week of 2018 and we expect another huge week of slaughter runs.  It’s quite possible we’ll break the 2.6 million head mark two weeks in a row. With the ample supply of ready barrows and gilts, packers are in the driver’s seat when it comes to setting prices.  Looking ahead the market is still hopeful there will be an uptick in global demand – but there is still a lot of uncertainty.  Barrow and gilts at the Iowa/Southern Minnesota closed $.55 lower with a range of $41 to $46 for a weighted average of $45.71; the Western Corn Belt closed $.58 lower with a range of $41 to $46 for a weighted average of $45.65; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.26 lower with a range of $41 to $47.16 for a weighted average of $46.12.

Butcher hogs prices at the Midwest cash markets are unavailable.  At Illinois, slaughter sow receipts are up on the week and the year.  Prices are steady at $22 to $40 with moderate demand for moderate offerings.  Barrow and gilt prices are steady at $26 to $40 with moderate demand for moderate offerings.

Pork values closed steady – up $.16 at $71.96.  The picnics, butts, loins, ribs all closed higher.  Hams were sharply lower.  Bellies were weak.

Estimated hog slaughter is 477,000 head – down 2,000 on the week and up 8,000 on the year.