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Cattle futures higher ahead of Friday’s On Feed numbers

At the Chicago Mercantile Exchange, live cattle ended the day higher in a narrow range on position squaring ahead of Friday’s Cattle on Feed report and follow-through buying.  Feeder cattle were higher on the same factors.  June live cattle closed $.17 higher at $96.50 and August live cattle closed $.07 higher at $96.85.  August feeder cattle closed $.70 higher at $133.57 and September feeder cattle closed $.50 higher at $134.95. 

Another round of light to moderate direct cash cattle trade took place across most of cattle country on Wednesday.  Southern live deals are at $102, that’s about $2 to $4 higher than the rest of this week’s business.  But it’s also $1.50 lower than last week’s weighted averages in Texas and about $3 lower than the weighted average basis in Kansas.  Dressed deals are at mostly $162, $2 to $5 higher than Monday and Tuesday’s trade.  The latest round of deals are about $7 lower than last week’s weighted average basis in Nebraska.  Asking prices for cattle left on showlists are at $108 live and $170 dressed. 

At the Sioux Falls Regional Cattle auction in South Dakota this week, feeder steers and heifers were too lightly tested previously to allow for a good comparison to this week’s very large offering.  There was a firm to higher undertone noted.  The USDA says demand was good to very good for all classes and weights of cattle for the sale.  There were numerous small packages of lightweight yearlings along with many strings of yearlings ranging from part loads to full, multiple load lots.  Overall flesh was attractive.  Feeder supplies included 52 percent steers and 92 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 651 to 698 pounds brought $148.50 to $158 and feeder steers 800 to 847 pounds brought $126 to $134.50.  Medium and Large 1 feeder heifers 600 to 649 pounds brought $128 to $145 and feeder heifers 704 to 748 pounds brought $116 to $136.75. 

Boxed beef continued its slide, closing sharply lower on light demand for heavy offerings.  Choice closed $9.96 lower at $217.93 and Select closed $5.09 lower at $208.08.  The Choice/Select spread is $9.85.  Estimated cattle slaughter is 120,000 head – up 4,000 on the week and down 2,000 on the year. 

Lean hog futures ended the day mixed on spread adjustments.  July lean hogs ended the day unchanged at $49.65 and August lean hogs closed $.15 higher at $53.17. 

Cash hogs closed steady to weak with solid negotiated numbers. Packers continue to push daily slaughter totals higher and that’s exactly what the industry needs as supplies of market-ready hogs remain more than ample.  The ability to ramp up chain speed is helping to keep the supply chain functional.  However, the industry is still working through the backlog of hogs that were a result of the slowdowns and shutdowns from COVID-19 and that’s going to take some time to work through completely.  All eyes will be on Thursday morning’s Export Sales Report as the global demand for US pork will be a vital component to the price picture.  Barrows and gilts at the National Daily direct closed $.36 lower with a base range of $25 to $30 for a weighted average of $28.70; the Iowa/Minnesota closed $.15 lower for a weighted average of $28.93; the Western Corn Belt closed $.64 lower for a weighted average of $29.08.  Prices at the Eastern Corn Belt was not reported due to confidentiality. 

Butcher hog prices are steady at $20 at Dorchester, Wisconsin, and lower at $18 to $20 in Red Oak, Iowa. At Illinois, slaughter sow prices were steady with moderate demand for heavy offerings at $7 to $18.  Barrow and gilt prices were steady with light demand for heavy offerings at $10 to $18.  Boars ranged from $1 to $5. 

Pork values closed higher – up $1.20 at $65.47.  Hams and bellies closed sharply higher.  Ribs were higher.  Picnics, butts, and loins all closed sharply lower.  Estimated hog slaughter is 460,000 head – up 10,000 on the week, but down 19,000 on the year. 

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