Market News

Cattle futures close with triple digit gains

DTN reported a few scattered deals on the cattle in parts of the North on Thursday at 154.00, fully steady with last week’s weighted average basis Nebraska, but when cattle futures rose sharply all business ceased and asking prices went up to 101.00 to 102.00 in the South, and 160 in the North. The rally in cattle futures was due in part to a rise in beef export sales and cash optimism. The kill was estimated at 110,000 head, even with last week, but 4,000 more than last year.

Boxed beef cutout values were weak to lower on light to moderate demand and moderate offerings. Choice beef 177.89, down .55, select 167.74, down 1.85.

Chicago Mercantile Exchange live cattle contracts settled 1.52 to 3.00 higher as buyers quickly reacted to market pressure that developed on Wednesday, as prices moved to triple-digit gains within minutes of the opening bell, and pushed October and December contracts to limit gains.. The widespread support in all live cattle markets focused on the ability to draw buyers back into the complex following the midweek sell off.

Feeder cattle ended the session 2.02 to 4.02 higher as buyer support on Thursday was reactionary to the sharp losses midweek which quickly and aggressively pushed contracts to new lows and triple digit losses. The ability to wipe out the midweek losses in a matter of a couple hours after trade opened Thursday morning indicated not only how volatile the market has become, but how little underlying depth selling pressure had.

The Springfield, Missouri Livestock Marketing Center had receipts of 1,383 cattle on Wednesday. Compared to last week, steer calves weighing less than 500 pounds were not well tested, 500 to 550 pound calves traded 5.00 to 8.00 lower, over 500 pounds 3.00 to 7.00 lower. Heavy yearling steers had no comparison. Heifer calves sold steady to 5.00 higher with heifers suitable for replacement at a higher premium. Demand was light to moderate, with good demand for replacement heifers as some buyers take advantage of the down market. Feeder steers medium and large 1 averaging 618 pounds brought 114.97 per hundredweight. 592 pound replacement heifers traded at 111.70.

Lean hogs settled .17 lower to .52 higher as firm to moderate support slowly trickled back into hog futures trade. Only the December through April contracts closed lower. The ability to spark additional buyer support through the last half of the week is partially based on spillover support from the cattle complex.

Barrows and gilts in the Iowa/Minnesota direct trade closed .31 lower, the West was down .33 with both at 45.90 weighted average on a carcass basis. Nationally the hog market was .33 lower at 45.47. The Missouri direct base carcass meat price closed steady from 38.00 to 39.00. Midwest hogs on a live basis were steady from 22.00 to 33.00.

The pork carcass cutout value was down .49 FOB plant at 72.52.

Pork packer margins remain strong creating the desire to focus even more aggressively on procurement schedules. Daily schedules through the end of the week are around 440,000 head per day with an expected Saturday run likely to reach 305,000 head.

The Thursday hog kill was estimated at 441,000 head, 29,000 greater than last week and 5,000 more than last year.