Market News

Big gains for cattle futures ahead of direct trade

Chicago Mercantile Exchange live and feeder cattle futures were sharply higher, supported by last week’s direct business and optimism about this week’s trade. Feeders picked up additional support from the lower move in corn. February live was up $3.42 at $171.92 and April was $2.25 higher at $174.50. January feeders were $3.12 higher at $225.42 and March was up $3.35 at $226.45.

Direct cash cattle markets were mostly quiet. The day’s big feature was the distribution of the show list, which looks mixed, larger in Kansas, Nebraska, and Colorado, smaller in Texas. Bids and asking prices are not defined and it looks like widespread trade will wait until the back half of the week. There USDA says there were a handful of sales in the Western Corn Belt at $175 on the live basis, but not enough to establish a test. Last week’s business was light to moderate, mainly at $172 live in the south, $1 higher than the previous week’s weighted average, and mostly $272 to $273 dressed in the north, up $2 to $3. Trade volume and formula totals were lower in Kansas, Nebraska, and Texas.

Boxed beef closed sharply lower with moderate to heavy movement. Choice was down $5.37 at $284.34 and Select beef was $1.47 lower at $258.86. The estimated cattle slaughter of 126,000 head was up 26,000 on the week and 2,000 on the year.

At midsession for the Joplin Regional Stockyards feeder cattle sale in Missouri, compared to the previous test, feeder steers and heifers were $2 to $10 higher, indicative of the strong demand after a couple of weeks of slower activity. The USDA says receipts were up from the prior report and a year ago. 60% of the offering were steers and 67% of the run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 600 to 700 pounds were reported at $233 to $260 and 700-to-800-pound steers sold at $217 to $237.50. Medium and Large 1 feeder heifers weighing 500 to 600 pounds ranged from $220 to $253 and 600-to-700-pound heifers brought $212 to $230.

Lean hog futures were sharply lower, pressured by contracts’ premium to the cash index. The recent higher trend in pork was not a factor. February was down $2.65 at $65.32 and April was $2.35 lower at $72.50.

Cash hogs were steady to higher with solid closing negotiated movement at the major direct markets. Many buyers came back from the second consecutive long weekend in need of some near-term market ready numbers and with a bullish assessment of holiday retail clearance. Long-term pork demand continues to be a question mark, but the first couple of wholesale reports of 2024 seem to indicate good retail demand to end 2023. California’s Proposition 12 regulations officially started on Monday.

National direct barrows and gilts closed $1.56 higher with a base price range of $42 to $49.50 for a weighted average of $45.13, while Iowa/Southern Minnesota was up $.71 at $46.03 and the Western Corn Belt was $2.05 higher at $45.94. The Eastern Corn Belt was not reported due to confidentiality. Butcher hogs at the Midwest cash markets were steady with the last reported test at $44. Illinois direct sows were steady at $28 to $40 with moderate demand for moderate offerings. Barrows and gilts were steady at $25 to $35, also with moderate demand and offerings. Boars ranged from $5 to $20.

Pork was up $.34, closing at $85.10. Loins and ribs were firm with bellies sharply higher, while butts were weak with picnics and hams sharply lower. The estimated hog slaughter of 492,000 head was up 41,000 on the week and 57,000 on the year. Friday’s slaughter was revised to 479,000 head, 51,000 more than the initial guess.

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