Market News

Cattle contracts close higher, but lean hogs were mostly lower: June 23, 2009

Chicago Mercantile Exchange live cattle contracts settled 20 to 47 higher on firm midday boxed beef and their discount to last week’s cash business. Optimism about this week’s cash trade was also a factor in Tuesday’s gains. June finished .37 higher at 81.50, and August was up .47 at 83.32.  Boxed beef cutout values were firm on light demand and offerings. Choice boxed beef was up .27 at 140.12, and select was .37 higher at 132.31.

Feeder cattle closed 20 to 90 points higher on short covering and follow through buying. Feeders appeared to ignore their premium to cash and the higher corn values. August was up .77 at 99.70, and September was up .90 at 99.77.

Feeder cattle receipts at Joplin, Missouri on Monday totaled 5739 head. Compared to last week, steers and heifers weighing less than 600 lbs were steady, over 600 lbs steady to 2.00 higher. Demand was moderate to good on a moderate supply. Feeder steers medium and large 1, 190 head weighing 550 to 597 lbs traded from 104.00 to 110.50. 146 heifers weighing 501-545 traded from 92.00 to 98.50 per hundredweight.

Tuesday’s cattle slaughter was estimated at 129,000 head, the same as last week and last year. Cattle buying interest is very slow with just a few token bids reported by private sources at 79.00 in the South where asking prices are generally 84 to 85. Feedlot operators in the North are asking 134.00 to 135, but no bids have been reported there. A serious market test is not expected to surface until Thursday or Friday. Slaughter cattle receipts at Dunlap, Iowa totaled only 316 head. Choice steers and heifers trended steady to .50 higher, and a limited supply of Holstein steers were 1.00 to 150 higher. Choice steers and heifers topped at 81.50, and Holstein steers at 73.75.

Barrows and gilts at the terminals trended mostly steady to firm with an instance of 1.50 higher from 31.50 to 40 on a live basis. The Missouri direct base carcass meat price was 1.00 higher from 49.00 to 53.00. Iowa/Minnesota hogs closed .36 higher at 57.57 on a carcass basis, the West was up .26 at 57.71, and the East closed at 55.34 up 1.12. Hog slaughter was estimated at 412,000 head, 2,000 less than last week and 13,000 fewer than last year. Negotiated hog totals have been quite light due to extremely high temperatures, tightening seasonal numbers and less than favorable packer margins. Chain speed is expected to remain slow throughout the week. Wednesday’s cash bids are expected to be steady to areas of weakness.

Lean hogs settled 40 points higher to 87 lower with only the 2010 months showing gains. Light gains were posted in most months early in the session but momentum evaporated near midsession despite reports of higher cash prices. There appeared to be a lack of significant buying interest even near the $60.00 level. July closed .32 lower at 60.12, and August was down .45 at 60.45. Pork trading was slow, with light to moderate demand and moderate to heavy offerings. The pork carcass cutout was down 1.40 at 54.63.

Pork bellies closed 130 to 160 points higher. Cash markets remain weak with light overall buying seen, and this trend is expected to continue over the next several weeks. July was up 1.30 at 63.20, and August was up 1.60 at 64.30.