Market News

Cattle and hog contracts close higher in Chicago: July 1, 2009

Chicago Mercantile Exchange live cattle contracts settled 37 to 82 points higher on buy stops. A stronger stock market provided some additional support. Some traders worked August/October and October/December bull spreads while waiting for the cash trade to develop. Modestly higher corn values lent some support to the deferred issues. August was up .50 closing at 85.75, and September was up .60 at 90.77. Boxed beef cutout values were weak to lower on moderate demand and offerings. Choice beef was down 1.18 at 138.19 and select was off .63 at 132.48.

Feeder cattle contracts settled 37 to 95 higher after tripping buy stops and spreading into August and October out of September. August feeders finished .95 higher at 103.77, and September was up .37 at 102.17.

Feeder cattle receipts at the Ozarks Regional Stockyards at West Plains, MO totaled 3633 head on Tuesday. Compared to last week, steers were firm to 4.00 higher; heifers were 1.00 to 5.00 higher. Steers, medium and large 1 and 1-2 weighing 500 to 600 lbs traded from 100.00 to 110.00, 7 to 8 weights from 96.00 to 101.00. Feeder heifers weighing 500 to 600 pounds brought 88.00 to 97.25 and 7 to 8 weights from 94.00 to 96.00 per hundredweight.

Cattle slaughter on Wednesday was estimated at 127,000 head, 3,000 less than last week, but the same as last year. There was very little action in the feedlot trade with buying interest probably delayed until Thursday. Asking prices are around 85 + in the South and 134 + in the North, with bids at 80 to 81 and 128. Since the Chicago mercantile Exchange is closed on Friday buyers and sellers may try to complete business on Thursday. Yet trading could be delayed until Friday.

Hog slaughter was estimated at 412,000 head, 5,000 more than last week, but 18,000 less than last year. Barrows and gilts at the terminals were mostly steady with an instance of 1.00 lower from 33 to 41 on a live basis. Missouri direct base carcass meat price was steady from 48 to 53. Iowa/Minnesota hogs closed .35 higher at 56.39 on a carcass basis, the West was up .58 at 57.92, and the East was down .12 at 54.14. A big part of the defensiveness in the cash hog market is tied to lackluster pork demand and pork margins. Tuesday’s pork carcass cutout was sharply lower. Look for Friday’s cash market to be no better than steady as most packers reportedly have adequate inventory to carry them through the holiday weekend.

Lean hogs settled 5 to 150 points higher on stronger outside markets, short covering, buy stops and spreading into July and October out of August. July finished at 59.25 up .57, and, August was up .05 at 60.70. Pork trading was slow, with mostly light demand and moderate offerings. The lean carcass cutout was down .28 at 53.77.

Pork bellies ended 110 higher to 100 points lower with moderate buying support in the front months. This was the end of a four-day price slide as the first of the month is likely to have drawn some additional bullish momentum. July closed 1.10 higher at 55.40, and August was up .32 at 56.02.