Market News

Cash, pork push hog futures lower

Chicago Mercantile Exchange live cattle futures were modestly lower on profit taking and the recent wholesale trend, as traders get ready for the week’s widespread direct cash business. August was down $.02 at $108.60 and October was $.32 lower at $109.95.

Feeder cattle were down on the same factors as the live pit, with additional pressure from the firm corn. As corn moved down from its highs, feeders moved up from their lows, ending the session in the middle of the day’s range. August was $.62 lower at $151.20 and September was down $.60 at $151.35.

Direct cash cattle markets were mostly quiet, with the week’s widespread direct business waiting until Friday. A handful of sales were reported in Iowa at $175.50 dressed. Asking prices held at $114 to $115 on the live basis and $182 to $183+ dressed, with bids of $109 to $110 live and $172 to $174 dressed. When trade gets started will depend on packer demand and the willingness of feedlot managers to adjust the asking prices. Both sides will be watching the futures market and wholesale business, expecting beef demand to improve as retailers get ready for Labor Day. For now, though, wholesale interest remains moderate at best. Weekly export numbers were bullish.

Boxed beef closed mixed on light to moderate demand and offerings. Choice was up $.05 at $203.80 and Select was down $.48 at $197.10. The estimated cattle slaughter of 120,000 head was down 1,000 on the week, but up 2,000 on the year.

At the Mitchell Livestock Auction feeder cattle sale in South Dakota, compared to the previous week, steers and heifers were mostly steady with firm undertones, but in a narrow comparison because of different weight classes. The USDA says demand was good overall, best for lighter fleshed animals. Most of the feeder run were steers and the entire offering weighed more than 600 pounds. Thin fleshed Medium and Large 1 feeder steers weighing 910 to 925 pounds brought $152.25 to $155.50 and Large 1 steers weighing 1,000 to 1,100 pounds ranged from $125.75 to $136.75. Medium and Large 1 feeder heifers weighing 700 to 800 pounds were reported at $142.50 to $153.75 and 900 to 1,000-pound heifers sold at $125 to $128.75.

Lean hog futures were lower, under another round of pressure from cash and wholesale business. Contracts are at a big discount to cash, but the fundamentals overwhelmed the technical Thursday. August was $1.27 lower at $58.97 and October was down $1.12 at $49.65.

Cash hogs were lower with light closing negotiated numbers at the major direct hog markets. The available ready numbers continue to show more signs of expansion and the wholesale market continues to slide, with a lot of export demand uncertainties. Still, those slow negotiated numbers could be a sign of resistance. It was a strong week for exports, with Mexico the big buyer, but it is questionable if that trend will continue, especially as trade tensions with some major U.S. purchasers continue. The market could be in for another bearish cold storage report in less than three weeks. Estimates for Saturday’s slaughter are around 70,000 head.

Iowa/Southern Minnesota direct barrows and gilts closed $1.25 lower at $55 to $57.50 for a weighted average of $56.38, the Western Cornbelt was down $1.45 at $53 to $57.50 with an average of $56.11, and national direct business was $1.41 lower at $53 to $57.50 for an average of $56.22. Butcher hogs at the Midwest cash markets were $1 to $2 lower at $38. Illinois direct sows were mostly steady at $21 to $35 on light to moderate demand for moderate offerings. Barrows and gilts were $1 lower at $26 to $42 on moderate demand and offerings. Boars ranged from $8 to $26.

Pork closed $.63 lower at $73.24. Loins were higher, while butts, picnics, ribs, hams, and bellies were lower, including a $3.74 drop in butts. The estimated hog slaughter of 450,000 head was up 83,000 on the week and 14,000 on the year.