Market News

Supply concerns pressure hog futures

At the Chicago Mercantile Exchange, live cattle closed higher on optimism ahead of widespread direct cash business and higher wholesale values during the session.  Feeder cattle were higher on the day’s lower move in corn.  October live cattle closed $1.35 higher at $99.35 and December live cattle closed $1.27 higher at $105.30.  October feeder cattle closed $3.10 higher at $137.30 and November feeder cattle closed $1.87 higher at $135.05. 

Direct cash cattle trade activity is at a standstill to start the week.  Bids and asking prices have yet to be established.  Showlists this week are lower across all feeding areas.  Wednesday’s Fed Cattle Exchange has an offering of 1,229 head, while that could help to spark some interest, it’s more than likely significant trade volume won’t develop until the latter half of the week. 

At the Tri-State Livestock Auction market in Nebraska, receipts are up on the week and down on the year.  Compared to last week, weights under 650 pounds were $2 to $3 lower.  Steers 650 and over were $3 to $6 higher.  Heifers over 900 pounds were $4 higher.  The USDA says demand was moderate to good and supply was heavy.  Feeder supply included 64 percent steers and 27 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 563 to 582 pounds brought $150 to $162.50 and feeder steers 671 to 684 pounds brought $156 to $162. Medium and Large 1 feeder heifers 402 to 448 pounds brought $146.50 to $151.50 and feeder heifers 593 pounds brought $151.50. 

Boxed beef closed lower to sharply lower on light to moderate demand and moderate to heavy offerings.  Choice closed $.85 lower at $219.77 and Select closed $2.66 lower at $193.91.  The Choice/Select spread is $25.86.  Estimated cattle slaughter is 118,000 head – up 2,000 on the week and down 1,000 on the year. 

Lean hog futures closed lower on follow-through selling and concerns that domestic supply outweighs the potential for any significant demand increases on the global market.  October lean hogs closed $1.52 lower at $62.10 and December lean hogs closed $3.00 lower at $67.67. 

Cash hogs ended the day weak with very large negotiated purchase totals.  The cash hog market is finding it difficult to move higher – especially as we know domestic supply is strong.  There’s hope that demand for US pork will improve significantly on the global market, but with the extremely large slaughter runs the supply concerns are putting a lid on prices to move higher. Barrows and gilts at the Iowa/Southern Minnesota closed $.38 lower for a weighted average of $45.39; the Western Corn Belt closed $.37 lower for a weighted average of $45.37; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.01 lower with a base range of $41 to $47 for a weighted average of $45.08. 

Butcher hog prices at the Midwest cash markets are steady at $33.  At Illinois, slaughter sow prices were weak at $18 to $29 with moderate demand for heavy offerings.  Barrow and gilt prices were weak at $23 to $31 with light demand for moderate offerings.   

Pork values closed weak – down $.45 at $69.21.  Picnics were lower.  Loins, bellies, and butts were weak.  Hams were steady.  Ribs closed higher.  Estimated hog slaughter is 488,000 head – up 3,000 on the week and up 68,000 on the year.