Market News

China’s cancellation of pork drives prices lower

At the Chicago Mercantile Exchange, live cattle futures closed lower on the weaker cash trade and supply concerns.  Feeder cattle futures were lower on technical pressure and the day’s firm moves in corn.  April live cattle closed $2.72 lower at $124.05 and June live cattle closed $2.97 lower at $115.37.  May feeder cattle closed $2.97 lower at $143.55 and August feeder cattle closed $3.47 lower at $153.25. 

A light to moderate direct cash cattle trade developed in parts of the North.  Deals in Nebraska and Colorado were reported at $127 live, that’s roughly $3 lower than last week’s weighted averages.  Dressed deals in Nebraska were also $3 below last week’s weighted averages at $205.  Some cleanup business could still happen – but it looks like trade is essentially wrapped up for the week.

At the Bassett Livestock Auction in Nebraska – receipts were up on the week.  Compared to the last sale – steers were unevenly steady and heifers under 500 pounds were $1 to $4 higher with heifers over 500 pounds $2 to $7 lower.  The USDA says demand was good with several buyers for all consignments of fall and yearling calves.  Feeder supply included 62 percent steers and 56 percent of the feeder supply was over 600 pounds.  Medium and Large 1 feeder steers 550 to 595 pounds brought $183 to $198.50 and feeder steers 806 to 843 pounds brought $147 to $153.50.  Medium and Large 1 feeder heifers 700 to 747 pounds brought $135 to $147.75 and feeder heifers 754 to 780 brought $134.25 to $146. 

Boxed beef closed steady to weak on light to moderate demand and moderate to heavy offerings.  Choice closed $.03 lower at $232.93 and Select closed $.53 lower at $219.75.  The Choice/Select spread is $13.18. Estimated cattle slaughter is 121,000 head – down 1,000 on the week and even on the year.

Lean hog futures closed sharply lower on the news that China cancelled its previously purchased US pork.  Technical pressure carried over into the market pushing contracts through support levels.  Thursday’s livestock slaughter report will also add pressure to prices.  May lean hogs closed $1.32 lower at $87.85 and June lean hogs closed $3.00 lower at $89.77. 

Cash hogs closed firm with moderate negotiated purchase totals.  The market remains optimistic that demand will increase and push prices higher as China continues to struggle with African Swine Fever and is having to look other places to meet their pork and protein needs.  But, the supply of ready barrows and gilts is ample and slaughter runs are continuing at their record or near record pace – which limits the market’s ability move higher.  Barrows and gilts at the National Daily Direct closed $.50 higher with a range of $73 to $84 for a weighted average of $81.24.  Prices and the regional direct markets were not reported at due to confidentiality. 

Butcher hog prices at the Midwest cash markets are steady at $55. At Illinois, slaughter sow prices are $5 higher at $49 to $65 with very good demand for light to moderate offerings.  Receipts are down on the week and the year.  Barrow and gilt prices are firm at $51 to $60 with good demand for moderate offerings. 

Pork values ended the day sharply lower – down $3.26 at $83.72.  Bellies were the main driver down $22.78 – which is more than a $37 difference from prices at midday.  Hams were also sharply lower.  Ribs were weak.  Butts, picnics, and loins were firm to higher.  Estimated hog slaughter is 476,000 head – down 1,000 on the week and up 11,000 on the year.