Market News

Hog futures higher on demand expectations

At the Chicago Mercantile Exchange, live cattle ended the day lower, waiting for cash business to develop.  Feeder cattle were mostly lower on the same factors with some additional pressure from the day’s higher move in corn.  February live cattle closed $.10 lower at $122.15 and April live cattle closed $.60 lower at $120.70.  March feeder cattle closed $.22 higher at $135.50 and April feeder cattle closed $.22 lower at $137.77. 

Another quiet day for direct cash cattle trade.  A few early bids have been floated at $121 live in the South, well below last week’s weighted averages.  Asking prices have yet to surface.  It’s likely significant trade volume will be delayed until the latter half of the week.  Wednesday’s Fed Cattle Exchange has an offering of 477 head. 

At the Tri-State Livestock Auction in Nebraska, compared to last week feeder steers under 650 pounds were steady to $4 higher, steers over 650 pounds were $10 to $14 lower.  Heifers under 600 pounds were $3 to $11 higher and heifers over 600 pounds were $1 to $6 lower.  The USDA says demand was moderate to good.  Receipts of 2,614 head were up on the week and down on the year.  Feeder supply included 62 percent steers and 63 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 605 to 647 pounds brought $150 to $165.50 and feeder steers 853 to 880 pounds brought $132.25 to $140.60.  Medium and Large 1 feeder heifers 550 to 576 pounds brought $153 to $159 and feeder heifers 719 to 740 pounds brought $132.75 to $139.25. 

Boxed beef closed weak on Choice and higher on select on moderate to good demand and moderate to heavy offerings.  Choice closed $.74 lower at $212.85 and Select closed $1.66 higher at $212.16.  The Choice/Select spread has narrowed to $.69.    Estimated cattle slaughter is 117,000 head, down 6,000 on the week and even on the year. 

Lean hog futures ended the day higher; contracts were oversold and due for a bounce.  Traders are also optimistic about the long-term demand picture.  February lean hogs closed $.27 higher at $66.22 and April lean hogs closed $.85 higher at $71.30. 

Cash hogs closed higher with very large negotiated purchases.  Packers had to bid up to move their desired numbers.  The industry remains optimistic demand for US pork will see a significant boost on the global market.  If demand is realized and increasingly more pork starts moving, it is very likely prices will start pushing higher.  Until then – expect the current pattern to continue.  Barrows and gilts at the National Daily Direct closed $.82 higher with a base range of $49 to $57 for a weighted average of $54.71; the Iowa/Minnesota closed $1.10 higher for a weighted average of $55.39; the Western Corn Belt closed $1.14 higher for a weighted average of $55.39; the Eastern Corn Belt had no comparison but a weighted average of $53.40. 

Butcher hogs at the Midwest cash markets are steady at $36 in Dorchester, Wisconsin and $30 in Garnavillo, Iowa.  At Illinois, slaughter sow prices were weak with moderate to good demand for heavy offerings at $13 to $22.  Barrow and gilt prices were firm with moderate to good demand for moderate offerings at $30 to $37. 

Pork values closed lower – down $1.38 at $75.88.  Bellies, hams, and butts were all sharply lower.  Loins, ribs, and picnics all closed higher.  Estimated hog slaughter is 498,000 head, up 5,000 on the week and 22,000 on the year.