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Hog futures up on oversold bounce

Chicago Mercantile Exchange live cattle futures were mixed, with nearby months down and deferred contracts up, getting ready for the USDA’s delayed Cattle on Feed report Friday and the week’s widespread direct cash business. February was $.70 lower at $127.62 and April was down $.60 at $128.60.

Feeder cattle were mixed on the same factors as the live pit. March was down $.65 at $143.22 and April was $.55 lower at $145.52.

Direct cash cattle business remained at a standstill. Packer inquiry did improve, with bids of $123 on the live basis and $198 to $201 dressed, but those were still below the asking prices of $128+ live and $205 to $207 dressed. Buyers and sellers are also watching conditions in the major feeding areas ahead of another expected round of winter weather. Widespread business might still wait until after those USDA numbers out at 3 Eastern/2 Central. Wednesday’s business was very light at $125 live in Kansas, Nebraska, and Texas.

At the Pratt Livestock Auction feeder cattle sale in Kansas, compared to the previous week, feeder steers weighing 750 to 800 pounds were mostly steady to $1 higher, while 850 to 950-pound steers were steady to firm. Feeder heifers weighing 700 to 800 pounds were $2 to $3 higher. The USDA says overall demand was good to very good for a mostly average to attractive offering. 60% of the offering were steers and 90% of the run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 800 to 900 pounds sold at $131.25 to $139 and 900 to 950-pound steers were reported at $134 to $136.10. Medium and Large 1 feeder heifers weighing 600 to 700 pounds ranged from $135 to $145 and 700 to 800-pound heifers brought $128 to $137.

Boxed beef closed mixed on moderate to good demand for light to moderate offerings. Choice was up $1.58 at $218.07 and Select was down $.09 at $211.41. The estimated cattle slaughter of 114,000 head was down 3,000 on the week and 4,000 on the year.

Lean hog futures were sharply higher, supported by an oversold bounce after several days of losses, along with cautious optimism about this latest round of trade talks with China. That said – there are still a lot of unknowns about China’s pledge to buy an additional $30 billion of U.S. ag goods and there is the possibility of tariffs on U.S. pork from Japan. April was $2.97 higher at $55.95 and June was up $2.92 at $75.67.

Cash hog business was steady to sharply lower, with light to moderate closing negotiated numbers for the major direct markets. Market ready supplies remain more than ample, even as slaughter levels hold at record or near record levels, putting even more pork on what’s already probably a saturated market, if recent wholesale activity is any indication. That’s even as the industry waits for the USMCA to be ratified, while keeping an eye on trade negotiations with China and potential tariffs from Japan. Late week weather issues could slow down runs in some areas. The shutdown delayed Cold Storage numbers are out Friday afternoon at 3 Eastern/2 Central. Also Friday, the USDA will be issuing six weeks of export sales numbers, most of which were delayed by that recent shutdown.

Iowa/Southern Minnesota direct barrows and gilts closed $2.05 lower at $44 to $47.75 for a weighted average of $45.55, the Western Cornbelt was down $2.26 at $44 to $47.75 with an average of $45.32, and national direct business was $1.53 lower at $44 to $47.85 for an average of $46.37. Butcher hogs at the Midwest cash markets were closed. Illinois direct sows were steady at $24 to $43 on moderate demand and offerings. Barrows and gilts were steady at $25 to $34 with light to moderate demand for moderate offerings. Boars ranged from $6 to $16.

Pork closed $1.06 higher at $61.23. Loins, ribs, and bellies were sharply higher, including a $9.56 gain in the bellies. Butts, picnics, and hams were sharply lower. The estimated hog slaughter of 475,000 head was up 5,000 on the week and 15,000 on the year.

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