Market News

Supply, demand concerns pressure hog futures

At the Chicago Mercantile Exchange, cattle futures ended the day higher supported by sharply higher wholesale values at midday.  The market is still waiting for direction from the cash trade.  February live cattle closed $1.02 higher at $122.57 and April live cattle closed $.75 higher at $124.60.  January feeder cattle closed $.82 higher at $146.20 and March feeder cattle closed $.97 higher at $144.30.

Direct cash cattle trade activity has been essentially non-existent.  Bids and asking prices have yet to surface.  There were a handful of sales in Iowa at $118 live.  Asking prices are expected to start around $120.  Cattle on Feed, Livestock Slaughter, and Cold Storage all come out later this week, it’s likely significant trade volume will be delayed until after those numbers are released.  Wednesday’s Fed Cattle Exchange has an offering of just 255 head.

At the Tri-State Livestock Auction in Nebraska, receipts were down on the week and the year.  Compared to last week steers were $1 to $11 higher, heifers were steady on a light test.  The USDA says demand was good on all cattle offered.  Feeder supply included 65 percent steers and 53 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 507 to 536 pounds brought $160 to $175.50 and feeder steers 651 to 693 pounds brought $142 to $154.25.  Feeder heifers 501 to 548 pounds brought $144 to $151 and feeder heifers 888 pounds brought $146.60.

Boxed beef closed steady to higher on light to moderate demand and light offerings.  Choice closed $.01 higher at $212.68 and Select closed $.97 higher at $204.73.  The Choice/Select spread closed at $7.95. Estimated cattle slaughter is 120,000 head – down 2,000 on the week and up 1,000 on the year.

Lean hog futures closed lower pressured by concerns over a projected larger hog supply and a demand picture that doesn’t seem to be strengthening.  Lower cash trade has also been negative to the market.  February lean hogs closed $1.17 lower at $62.65 and April lean hogs closed $1.15 lower at $67.83.

Cash hogs closed lower with moderate negotiated purchase totals.  Slaughter runs have started the last full week of 2018 off strong.  With the ample supply of ready barrows and gilts, packers aren’t having to work hard to move numbers.  Don’t look for prices to make any significant moves higher until the demand picture becomes more certain.  Barrows and gilts at the Iowa/Southern Minnesota closed $.49 lower with a range of $44 to $46 for a weighted average of $45.33; the  Western Corn Belt closed $.44 lower with a range of $41 to $46 for a weighted average of $45.30; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.36 lower with a range of $41 to $47.16 for a weighted average of $45.86.

Butcher hogs at the Midwest cash markets are steady in Dorchester, Wisconsin at $36.  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 $34 with moderate demand for moderate offerings.

Pork values closed steady – up $.04 at $72.00.  Picnics, ribs, and butts all closed higher.  Hams were steady.  Bellies and loins were weak.  Estimated hog slaughter is 477,000 head – down 2,000 on the week and up 4,000 on the year.