Market News

Cattle futures drift lower on supply concerns

At the Chicago Mercantile Exchange, live cattle futures saw modest losses on follow-through selling and worries about supply and demand later in the year.  The lack of direction from the cash trade also allowed contracts to drift lower.  Nearby feeder cattle contracts did find some support in the weak move in corn, but otherwise followed live contracts lower.  April live cattle closed $.67 lower at $126.90 and June live cattle closed $.40 lower at $120.72.  April feeder cattle closed $.02 higher at $146.22 and May feeder cattle closed $.90 lower at $149.80. 

Direct cash cattle trade activity has started the week very quiet.  Bids and asking prices have yet to surface.  Showlists are larger in Kansas, Colorado, and Nebraska, but smaller in Texas. Tomorrow’s Fed Cattle Exchange has an offering of 500 head.  Significant trade volume will likely be delayed until the latter half of the week. 

At the Sioux Falls Regional Market in South Dakota, receipts are down slightly on the week and up on the year.  Compared to last week feeder steers under 700 pounds were $10 to $15 higher, over 700 pounds were $5 to $10 higher.  Feeder heifers under 650 pounds were $5 to $10 higher with instances of $12 higher, over 650 pounds were $3 to $8 higher.  The USDA says demand was good to very good with the best demand on steers under 650 pounds.  The quality was very attractive with many long strings, full loads, and multiple load lots.  Flesh condition ranged from light to moderate plus, some heavy.  Feeder supply included 55 percent steers and 90 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 704 to 748 pounds brought $150 to $160.25 and feeder steers 906 to 932 pounds brought $137.50 to $142.  Medium and Large 1 feeder heifers 620 to 699 pounds brought $142.50 to $147.75 and feeder steers 705 to 748 pounds brought $133.50 to $144. 

Boxed beef closed firm on light to moderate demand and offerings.  Choice is $.51 higher at $229.51 and Select closed $.26 higher at $218.99.  Estimated cattle slaughter is 119,000 head – down 1,000 on the week and the year. 

Lean hog futures mixed on consolidation efforts after last week’s aggressive rally and profit taking.  Rumors that China could purchase some pork from the US wasn’t enough to support higher trade in all contracts.  May lean hogs closed $.10 lower at $86.65 and June lean hogs closed $.22 lower at $95.32. 

Cash hogs closed sharply higher with very large negotiated purchase totals.  China has been the ongoing driver behind the recent surge in the cash markets.  Between the optimism about trade talk progress and the country’s need to import more pork as it battles African Swine Fever, it’s been supportive to US prices.  Trade talks with China are set to resume on Thursday.  Optimism about increasing demand is especially good news as supplies of ready barrows and gilts remain ample and slaughter runs continue to hit record or near record numbers almost daily.  Barrows and gilts at the Iowa/Southern Minnesota closed $2.94 higher with a range of $65 to $76.50 for a weighted average of $74.35; the Western Corn Belt closed $3.17 higher with a range of $62 to $76.50 for an average of $74.21; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct is $3.91 higher with a range of $60.86 to $76.50 for a weighted average of $73.03.

Butcher hog prices at the Midwest cash markets are steady today at $45 and $46.  At Illinois, slaughter sow prices are mostly steady at $28 to $42 with light to moderate demand for light offerings.  Receipts are down on the week and the year.  Barrow and gilt prices are $2 higher at $40 to $48 with good demand for moderate offerings. 

Pork values closed higher at $81.07.  Picnics, butts, ribs, and bellies were all firm to sharply higher.  Loins and hams were steady to weak.  Estimated hog slaughter is 476,000 head – up 9,000 on the week and 15,000 on the year.