Market News

Cattle futures higher on cash expectations

At the Chicago Mercantile Exchange, live cattle futures ended the day higher on optimism ahead of this week’s direct cash cattle business.  There is also some position squaring ahead of Thursday’s Cattle on Feed report. Feeder cattle futures closed higher on the same factors along with additional support from the day’s lower move in corn and strong wholesale values during the session.  April live cattle closed $.85 higher at $127.15 and June live cattle closed $.97 higher at $122.45.  April feeder cattle were unchanged at $145.67 and May feeder cattle closed $.17 higher at $151.20. 

Direct cash cattle trade activity has been pretty quiet with just a handful of dressed deals in Iowa at $204.  Certainly not enough to establish a trend.  Bids for the most part have been non-existent to start the week and asking prices are at $130 live and $208-plus dressed.  Wednesday’s Fed Cattle Exchange has an offering of 1578 head.  Significant trade volume will likely be delayed until after Wednesday’s Fed Cattle Exchange. 

At the Russell Feeder Cattle Auction in Iowa – receipts were up from two weeks ago and on the year.  Compared to the most recent sale, feeder steers were mostly $3 to $6 higher and feeder heifers were mostly $2 to $5 higher.  The USDA says trade was active and demand was good.  Feeder supply included 60 percent steers and 61 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 500 to 543 pounds brought $172 to $190 and feeder steers 600 to 645 pounds brought $165.75 to $181.  Medium and Large 1 feeder heifers 601 to 644 pounds brought $146 to $159.50 and feeder heifers 653 to 699 pounds brought $138 to $148.50. 

Boxed beef closed higher on Choice and steady on Select on moderate to fairly good demand and moderate to heavy offerings. Choice closed $1.07 higher at $232.05 and Select closed $.07 lower at $221.15.  The Choice/Select spread closed at $10.90. Estimated cattle slaughter is 121,000 head – up 1,000 on the week and even on the year. 

Nearby lean hog futures closed lower while deferred months ended the day higher.  Concerns about the amount of pork in the near-term pressured prices.  However, confidence that long-term demand support will move into the market helped provide support for later contracts.  May lean hogs closed $1.10 lower at $88.97 and June lean hogs closed $1.17 lower at $97.12.

Cash hogs ended the day firm with moderate negotiated purchase totals.  The supply of ready barrows and gilts is ample, but demand potential remains strong.  That is causing a lot of back and forth in the markets. The trade is still watching as African Swine Fever spreads throughout China and Asia – adding to the theory that demand for US pork will increase as China continues to source the global market to meet its pork and protein needs.  And the industry is looking for any positive news to come out of trade talks between both the US and Japan and the US and China. Barrows and gilt at the Iowa/Southern Minnesota closed $.44 higher with a range of $70 to $79.25 for a weighted average of $78.21; the Western Corn Belt is $.45 higher with a range of $70 to $79.25 for a weighted average of $78.20; the Eastern Corn Belt had no comparison but traded in a range of $73 to $76 for an average of $75.75; and the National Daily Direct closed $.73 higher with a range of $70 to $79.25 for a weighted average of $77.30. 

No trends were available this morning at the Midwest cash markets.  At Illinois, slaughter sow prices are firm at $40 to $53 with good demand for moderate offerings.  Receipts are down on the week and the year.  Barrow and gilt prices are $2 higher at $48 to $56 with moderate demand for moderate offerings. 

Pork values ended the day weak – down $.51 at $86.53.  Bellies were sharply lower.  Hams were lower.  Butts were steady.  Loins, ribs, and picnics were all higher.  Estimated hog slaughter is 474,000 head – down 1,000 on the week and up 11,000 on the year.