Market News

Cattle futures continue to slide

At the Chicago Mercantile Exchange, live cattle futures continued their sharp losses and ended the day mostly limit down.  The reduction in slaughter capacity continues to add pressure to prices.  Feeder cattle were lower on the same factors, but, were somewhat limited by the day’s lower move in corn.  October live cattle closed $4.50 lower at $99.25 and December live cattle closed $4.50 lower at $103.95.  September feeder cattle closed $6.75 lower at $127.20 and October feeder cattle closed $6.20 lower at $127.55. 

Direct cash cattle trade is still at a standstill.  Bids and asking prices have yet to surface.  This week’s showlists are mixed – higher in Kansas, nearly steady in Texas, and lower in Colorado and Nebraska.  It’s likely significant trade volume will be delayed until the latter part of the week.  Tomorrow’s Fed Cattle Exchange has an offering of 462 head. 

At the Sioux Falls Regional Cattle Auction in South Dakota, receipts are down from the most recent sale.  Compared to two weeks ago, feeder steers were $6 to $8 lower on a light test.  Feeder heifers were lightly tested with a sharply lower undertone noted, with instances of $8 to $10 lower.  The USDA says demand was mostly moderate with demand on thin-fleshed yearlings steady on a few sales from last week.  The quality was average.  Feeder supply included 49 percent steers and 99 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 803 to 847 pounds brought $142 to $147 and feeder steers 992 pounds brought $125 to $133.  Medium and Large 1 feeder heifers 809 to 833 pounds brought $126 to $128.50 and feeder heifers 904 to 928 pounds brought $112 to $121. 

Boxed beef closed sharply higher on good demand for moderate to heavy offerings.  Choice closed $7.74 higher at $226.36 and Select is $2.79 higher at $200.58.  The Choice/Select spread closed at $25.78. Estimated cattle slaughter is 116,000 head – down 2,000 on the week and 3,000 on the year. 

Lean hogs closed mostly lower in choppy trade with pressure from lower wholesale values, the mixed cash trade during the session, and the drop in cattle futures.  The market still has hope that demand for US pork will increase as China turns to the global market to meet its pork needs, but that demand potential is not a certainty.  October lean hogs closed $2.50 lower at $64.57 and December lean hogs closed $.75 lower at $63.02. 

Cash hogs ended the day higher with strong negotiated purchase totals. Packers had to dig a little deeper to move their desired numbers.  The market continues its struggle to find direction as there are conflicting signals.  The demand picture remains rocky and pork production continues at a surplus – adding more pork to a market that is already saturated.  Barrows and gilts at the Iowa/Southern Minnesota closed $1.42 higher for a weighted average of $70.83; the Western Corn Belt closed $1.84 higher for a weighted average of $70.77; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $1.26 higher with a base range of $58.52 to $72.50 for a weighted average of $70.01. 

At Illinois, slaughter sow prices were firm at $33 to $48 with good demand for moderate offerings.  Receipts were up on the week and down on the year.  Barrow and gilt prices were $1 to $2 lower at $41 to $49 with moderate demand for moderate to heavy offerings. 

Pork values closed lower – down $.98 at $89.21.  Hams, bellies, and picnics were lower.  Loins were weak.  Ribs were steady.  Butts closed firm.  Estimated hog slaughter is 480,000 head – up 3,000 on the week and 10,000 on the year.  Monday’s hog slaughter has been revised to 458,000 head.