Market News

Hog futures down on pork demand uncertainties

Chicago Mercantile Exchange live cattle futures were down on the lower midday boxed beef as traders prepared for widespread direct cash cattle business. June was $.50 lower at $110.85 and August was down $.25 at $108.27.

Feeder cattle were mostly sharply lower on the lower midday boxed beef, recent rally in corn, and traders getting ready for the May contract’s expiration. May was up $.22 at $137.37 and August was down $1.77 at $143.00.

Direct cash cattle markets were generally quiet. Some isolated trade was reported at $115 live in Kansas and $185 dressed in Iowa. Widespread business is expected to develop either around midweek or wait until after Friday’s USDA Cattle on Feed report. This week’s showlist is mixed, a little bit larger overall than last week, and next week has a shortened schedule because of Memorial Day. That usually marks the official start of grilling season, but wet weather will continue to be a factor in some areas.

Boxed beef closed sharply lower on light to moderate demand and offerings. Choice was down $1.87 at $219.58 and Select was $1.45 lower at $206.58. The estimated cattle slaughter of 120,000 head was down 1,000 on both the week and the year.

At the Joplin Regional Stockyards feeder cattle sale in Missouri this week, steer and heifer calves were $2 to $6 lower and yearlings were $2 to $3 lower. Receipts were up sharply on the week, down modestly on the year, and the USDA says supply and demand were both moderate. 49% of the weekly run were steers and 63% of the offering weighed less than 600 pounds. Medium and Large 1 feeder steers weighing 500 to 600 pounds sold at $160 to $172 and 600 to 700-pound steers were reported at $142 to $166. Medium and Large 1 to 2 feeder heifers weighing 400 to 500 pounds ranged from $133 to $147.50 and 500 to 600 pounders brought $128 to $138.

Lean hog futures were sharply lower on pork demand uncertainties, some lower cash during the session, and contracts’ premium to the cash index. June was down $1.65 at $90.10 and July was $1.62 lower at $91.37.

Cash hogs were mixed with moderate to heavy closing negotiated sales at the major direct markets. Buyers are trying to improve their margins, while still moving enough numbers to meet expected demand. Domestic demand is good and while China is a question mark, the USMCA would be a big help for the industry, with Mexico a key customer for U.S. pork. Improved trade relations with Japan would also aid the export pace. African Swine Fever continues to spread in China, slashing herd size and lowering domestic production, but not raising prices as much as expected. According to Allendale, Russia’s Ministry of Agriculture projects 2019 pork exports at 100,000 tons, up 20% from 2018, and considerably larger than USDA projections.

Pork closed $.54 higher at $87.07. Ribs and hams were up sharply, and loins were modestly higher. Butts, picnics, and ribs were sharply lower. The estimated hog slaughter of 470,000 head was up 10,000 on the week and 9,000 on the year.

Iowa/Southern Minnesota direct barrows and gilts closed $.23 higher at $72 to $83 for a weighted average of $82.13, the Western Corn Belt was up $.33 at $72 to $83 with an average of $82.17, and the Eastern Corn Belt was $.17 higher at $77 to $83 for an average of $79.83, but national direct business was $.11 lower at $72 to $83 with an average of $80.91. Butcher hogs at the Midwest cash markets were $1 lower at $59. Illinois direct sows were $1 to $4 lower at $44 to $62 with light demand for heavy offerings. Barrows and gilts were weak at $50 to $58 on moderate demand and offerings. Boars ranged from $10 to $30.