Market News

Cattle and hog futures contracts settle higher on the CME: June 17, 2009

Chicago Mercantile Exchange (CME) live cattle contracts settled 47 to 117 points higher with short covering and spreading the main features of Wednesday’s session. Traders focused on higher cutout values as well as expectations of steady to higher cash prices later in the week. June ended .60 higher at 80.20, and August live cattle were up 1.00 at 81.37. Boxed beef cutout values were steady to firm on moderate demand and offerings. Choice boxed beef was .12 lower at 140.43, select was up .52 at 54.87.Feeder cattle ended 10 to 92 points higher on support from the live pit along with a lackluster corn futures market allowing buying opportunities in the nearby contract months according to DTN. Short covering and bull spreading were also features of the trade. August was up .77 at 97.32, and September was up 62 at 97.70.

Feeder cattle receipts at the Ozarks Regional Stockyards at West Plains, MO on Tuesday totaled 4800 head. Feeders over 500 lbs sold unevenly steady, steers under 500 lbs were 3.00 to 8.00 lower, heifers under 500 lbs were steady to 3.00 lower. Feeder steers, medium and large 1 weighing 500 to 600 lbs traded from 102.50 to 110.00, 7 to 8 weights from 93.50 to 99.00. 500 to 600 lb heifers brought 90.00 to 102.00, and 7 to 8 weights traded at 86.50 to 90.50 per hundredweight.

Wednesday’s cattle kill was estimated at 130,000 head, 2,000 more than last week, and 3,000 greater than last year. Packer inquiry was light to moderate with bids in the South at 79 and asking prices at 84, in Nebraska and Iowa there were a few bids from 129 to 130 on the rail, and feedlot operators would like 134.00. The Sioux Falls Terminal Market is discontinuing cattle sales at the end of June. In one of the last sales, receipts totaled 500 head, due to light receipts last week a trend was not applicable, however a higher undertone was noted. Choice 2-3 steers traded at 79.25 to 81.10, heifers at 79.00.

Barrows and gilts at the terminals trended steady to 2.00 higher from 37.00 to 40.00. Missouri direct base carcass meat price was steady to 1.00 higher from 49.00 to 52.00. Iowa/Minnesota hogs closed .50 higher at 50.27 on a carcass basis, the West was up .39 with a weighted average of 57.29, and the East was up 1.57 to close at 53.34. Wednesday’s hog slaughter was estimated at 412,000 head, 5,000 less than last week, but 2,000 more than last year. Hog markets appear to be benefitting from relatively light country movement and early week signs of better product demand at the wholesale level. There was significant strength in loin, butt and rib primal to start the week. Thursday’s market looks to be steady to higher.

Lean hogs settled 115 to 167 higher as buying once again returned to the market. There is talk that the market has hit bottom, and consumer demand may return to the market over the next couple of weeks. However DTN’s Rick Kment says it is premature to expect anything but upward moving markets over the long term. The overall fundamentals of the market remain weak. July ended 1.67 higher at 59.95, and August was up 1.45 at 59.55. Pork trading was moderate, with light to moderate demand and moderate to heavy offerings. The lean carcass cutout was down 2.77 at 54.87.