Market News

Hog futures shrug off midday drop in pork

Chicago Mercantile Exchange live cattle futures were higher, with boxed beef up sharply at midday, waiting to see how much direct business there was left to do after Thursday’s light to moderate activity. February was up $.22 at $126.35 and April was $.82 higher at $127.25.

Feeder cattle were mixed on the higher midday boxed beef and higher corn. January was down $.07 at $145.35 and March was up $.17 at $145.

Direct cash cattle markets were mostly quiet, aside from some clean-up trade. Business was nearly over for the week after Thursday’s activity as buyers and sellers tried to get wrapped up ahead of a winter storm in the Plains and a long holiday weekend. Trade was light to moderate at mainly $124 on the live basis, steady with the previous week, and mostly $199 dressed, down $1 from the prior week’s weighted average. Friday’s trade was steady with the bulk of Thursday’s activity. Asking prices for what’s left were $126 live and $203 dressed, with a few bids at $198 and $199 dressed in Iowa and Nebraska. The USDA’s Cattle on Feed numbers are out on the 24th and the semi-annual Cattle Inventory report is due on the 31st.

Boxed beef closed higher with moderate to good demand for moderate offerings. Choice was up $1.27 at $214.17 and Select was $1.28 higher at $212.75. The estimated cattle slaughter of 116,000 head was down 4,000 on the week and 1,000 on the year.

For the week in Missouri, feeder cattle weighing less than 650 pounds were steady to $5 higher, with heavier weights mostly steady to $2 lower. The UDSA says the supply was light to moderate, with the week’s receipts down sharply because of weather problems, including muddy conditions, rain, sleet, and snow. The offering was mostly midweight cattle, with only a small number of heavy yearlings or featherweight calves. 55% of the feeder offering were steers and 51% of those feeder cattle weighed less than 500 pounds. Medium and Large 1 feeder steers weighing 500 to 600 pounds were reported at $135 to $184 and 600 to 700-pound steers brought $129 to $166. Medium and Large 1 feeder heifers weighing 500 to 600 pounds sold at $121 to $161.50 and 600 to 700-pound heifers ranged from $118 to $148.25.

Hay prices in Missouri were steady with light to moderate demand for a moderate to heavy supply. The USDA says ending stocks at the end of 2019 were up 65% from the end of 2018 thanks to improved production. Large rounds of supreme quality alfalfa were reported at $180 to $200 with premium at $160 to $180. Large rounds of good quality mixed grass and hay ranged from $80 to $120 with fair to good at $60 to $80. Large rounds of good quality brome grass brought $80 to $120.

In Nebraska, compared to the previous week, all baled hay, ground and delivered hay, and alfalfa pellets were steady. The USDA says demand is mostly light for baled hay, good for alfalfa pellets, adding some contacts state there’s a lot of alfalfa hay on the market, but some of the larger buyers are unsure whether to continue stockpiling or pass on buying more. Sales were slow, typical for January. In eastern and central Nebraska, supreme and premium large rounds of alfalfa sold at $120 to $125 with good large rounds at $100 to $110. Premium large rounds of prairie hay brought $120 to $125 with small squares at $170 to $180. 17% protein dehydrated alfalfa pellets ranged from $320 to $330 with 15% protein sun-cured pellets at $290. In the Platte Valley, good large rounds of alfalfa were reported at $105 to $110, with ground and delivered alfalfa at $140 to $145 and ground and delivered alfalfa and corn stalk mix at $125 to $135. 17% protein dehydrated alfalfa pellets mostly sold at $270 to $275 with a few up to $285 and 15% protein sun-cured pellets at $250. In western Nebraska, good large squares of alfalfa were pegged at $160 to $175. Ground and delivered alfalfa brought $153 to $158. 15% protein sun-cured alfalfa pellets were reported at $255.

Lean hog futures were mostly higher on spread trade and short covering, waiting for indications of improved demand from China now that Phase One of the trade deal has been signed. Contracts were able to overcome a big midday drop in pork. February was up $.80 at $67.67 and April was $.32 higher at $74.10.

Cash hogs were lower, with moderate negotiated numbers for the major direct markets. Buyers were watching the weather in the Midwest, which probably limited movement in some areas, while trying to use the available market ready numbers for leverage as the industry waits for more clarity on purchases by China. The coming week’s export sales report is pushed back to Friday by Monday’s holiday. The USDA’s monthly cold storage and livestock slaughter numbers are out that Wednesday and Thursday, respectively. Saturday’s slaughter was projected at 120,000 head, with activity restricted in parts of the Midwest by the weather.

Pork closed $.02 higher at $75.47. Loins, picnics, ribs, and bellies were firm to sharply higher, while butts and hams were sharply lower. The estimated hog slaughter of 464,000 head was down 26,000 head on the week but up 10,000 on the year.

National direct barrows and gilts closed $.43 lower at $46 to $51.68 with a weighted average of $50.79, while Iowa/Southern Minnesota was down $1.44 at $49.61 and the Western Corn Belt was $1.38 lower at $49.67. Illinois direct sows were steady at $10 to $19 on light to moderate demand for moderate offerings. Barrows and gilts were steady at $28 to $36 with moderate demand and offerings. Boars ranged from $5 to $15.

The USDA says all early weaned and feeder pigs were steady to $1 lower with moderate demand for moderate offerings. The total composite formula range for early weaned pigs was $40.50 to $76.50 with a weighted average of $53.03 and the total composite cash range was $47 to $69 with an average of $60.73, for a weighted average of $56.37 on all early weaned pigs. The total composite cash range on feeder pigs was $57 to $75 for an average of $65.91.