Market News

Hog futures down on demand concerns

Chicago Mercantile Exchange live cattle futures were modestly to sharply lower on the lower midday boxed beef and unconfirmed reports of a higher Chinese tariff on U.S. beef. The USDA’s Cattle on Feed report looks mostly neutral to slightly bullish, with placements at the low end of analysts’ estimates. August was down $.35 at $104.62 and October was $1.70 lower at $99.40.

Feeder cattle were pressured by the same factors as the live pit. August was $1.05 lower at $137.35 and September was down $3.17 at $133.25.

Direct cash cattle business was light to moderate. Trade in the south was reported at mostly $106 live, up $1 on the week, with dressed activity in the north at mostly $175, $4.50 higher than the previous week’s weighted average for Nebraska. Asking prices Friday afternoon were around $109 live and $178 to $180 dressed with bids of $107 live. Thursday’s trade was light, mainly at $108 live and $174 to $178 dressed, with the higher end of those sales for delivery in early September.

Boxed beef closed sharply lower on light to moderate demand and offerings. Choice was down $1.76 at $237.52 and Select was $3.20 lower at $212.71. The estimated cattle slaughter of 115,000 head was up 1,000 on both the week and the year.

In Missouri for the week, feeder cattle were steady to $2 higher with a light offering. The USDA says not only was the supply light, at 8,200 head, the weekly feeder receipts were lower than in any normal week in memory, and down nearly 4,000 head from the previous week. 52% of the weekly feeder run weighed less than 600 pounds. Medium and Large 1 feeder steers weighing 600 to 700 pounds sold at $135.50 to $163.25 and 700 to 800-pound steers brought $120 to $148.50. Medium and Large 1 feeder heifers weighing 500 to 600 pounds sold at $120 to $153 and 600 to 700-pound heifers were reported at $110 to $147.25.

The USDA says hay demand in Iowa is high. The third cutting of alfalfa is ongoing and while the volume of hay per acre is lower than the second cutting, quality is better. Supreme quality small squares of alfalfa sold at $260 to $300 with premium large rounds at $240. Premium small squares of alfalfa were pegged at $205 to $245 with large squares at $185. Premium small squares of grass hay came out at $240 with good large squares at $160 to $180.

In Missouri, hay prices were steady to weak with moderate supply and demand. Large rounds of supreme quality alfalfa sold at $185 to $225 with premium at $170 to $200. Large rounds of good quality mixed grass ranged from $80 to $100 and good quality brome grass brought $80 to $120.

For Nebraska, all reported forages were steady with light demand. In eastern and central parts of the state, good large squares of alfalfa sold at $150 to $160 with fair large squares at $140. Premium large rounds of prairie hay brought $125 with premium small squares at $165 to $170. 17% protein dehydrated alfalfa pellets came out at $320. In the Platte Valley, good large rounds of alfalfa were pegged at $110. Ground and delivered alfalfa ranged from $140 to $145 with ground and delivered alfalfa and stubble mix at $125 to $135. 17% protein dehydrated alfalfa pellets sold at $270 to $275. In western Nebraska, good large squares of alfalfa brought $140 to $160 with ground and delivered alfalfa at $153 to $158.

Lean hog futures were sharply lower on the mostly lower cash during the session and the reports of a higher Chinese tariff on U.S. pork. October was limit down at $59.30 and December was $2.77 lower at $58.77.

Cash hogs were sharply lower with a big negotiated run to end the week. Buyers continued their efforts to secure the needed supplies and while runs have been large, domestic demand continues to be solid. China announced new retaliatory tariffs on U.S. goods, including an unconfirmed additional 10% on U.S. pork and beef. As African Swine Fever continues to spread, China’s General Administration of Customs says pork imports for July were 182,227 tons, up more than 20 million from June and more than double the July 2018 total.

Pork closed $.29 lower at $79.65. Ribs dropped $5.97, with hams lower and loins weak. Butts, picnics, and bellies all gained at least $1. The estimated hog slaughter of 476,000 head was up 22,000 on both the week and the year.

National direct barrows and gilts closed $1.57 lower at $55 to $70 with a weighted average of $64.55, while Iowa/Southern Minnesota was down $1.59 at $63.88, the Western Corn Belt was $1.81 lower at $63.71, and the Eastern Corn Belt was down $1.63 at $64.87. Butcher hogs at the Midwest cash markets were $2 lower at $45 to $51. Illinois direct sows were $1 to $4 lower at $27 to $39 on moderate demand for light to moderate offerings. Barrows and gilts were $1 lower at $39 to $47 with light to moderate demand for moderate offerings. Boars ranged from $8 to $27.

The USDA says early weaned pigs were $3 lower and all feeder pigs were $6 lower. The total composite formula range for all early weaned pigs was $24.49 to $49.64 with an average of $39.34 and the total composite cash range was $14 to $27.50 with an average of $19.28, putting the weighted average for all early weaned pigs at $30.51. The total composite cash range for feeder pigs was $25 to $38 with a weighted average of $31.41.