Market News

Cash cattle trade very slow

The feedlot cattle trade remained limited on Friday afternoon, although it did appear packers were still trying to buy cattle. Buyers are short bought on one hand, yet cautious due to eroding carcass value on the other. USDA mandatory reported live sales in the South at 150.00, and dressed sales in the North from 240.00 to 242.00, and live sales from 150.00 to 153.00. The weekly cattle kill is estimated at 551,000 head, 30,000 less than last week, and down 28,000 from 2014.

Boxed beef cutout values were lower on light demand and moderate to heavy offerings. Choice beef was down 2.74 at 236.98, and select was 2.59 lower at 233.99.

Live cattle contracts on the Chicago Mercantile Exchange ended with sharp losses on Friday. The focus was on the recent pressure in boxed beef values and that kept buyer’s extremely cautious heading into the weekend. August settled at 147.47 down 1.00, and October was 1.37 lower at 150.42.

Feeder cattle contracts saw firm gains in the market in the early trade on Friday, but futures started to tumble at midday and ended lower pressured by the losses in the live contracts and the lower boxed beef values at midday. Additional pressure came from higher corn futures prices. August futures were down .50 at 211.25, and September was .60 lower at 209.62.

Feeder cattle receipts at Missouri auctions this week totaled just 9,052 head. Compared to the previous week, feeder steers and heifers sold unevenly steady on a very light test. Demand was uneven. Several barns that held sales the previous week took the week off. While a light supply is consistent with the time of the year, the amount of rain has negatively influenced the ability to get cattle to market. The flooded pastures are filled with mud and it is difficult to prepare and load cattle for transport. Feeder steers medium and large 1 averaging 677 pounds brought 238.83 per hundredweight. 684 pound heifers traded at 214.60.

Lean hogs settled mixed and traded in the same direction as seen through most of the week. Nearby contracts held moderate gains while the deferred issues held moderate losses in a wide range as light volume continued to create concerns of growing production levels through the first half of 2016. July hogs closed .25 higher at 78.97, and August was up .37 at 73.65.

Barrows and gilts in the Iowa/Minnesota direct trade closed .69 lower at 77.59 weighted average on a carcass basis, the West was down .62 at 77.49, and nationally the hogs were .50 lower at 76.85. Missouri direct base carcass meat price was steady from 69.00 to 71.00. Midwest hogs were lightly tested on a live basis, steady from 47.00 to 58.00.

The pork carcass cutout value is .48 lower at 80.79 FOB plant in the afternoon report.

Assuming no serious threat to the growing feed crop over the next 30-60 days, feed costs would suggest that hog breakeven values would ease a few dollars lower than at present into the low to mid-$60 range on a lean basis. Such a scenario continues to suggest decent hedging opportunities for pork producers, ensuring the reality of ongoing herd expansion.

The weekly hog slaughter was estimated by USDA at 2,079,000 head, 222,000 more than last week and 218,000 greater than last year.