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Cattle futures higher ahead of USDA inventory report

Chicago Mercantile Exchange live and feeder cattle were higher with boxed beef up at midday, expecting a bullish USDA Cattle Inventory report Tuesday. Those numbers are out at 3 Eastern/2 Central. February live cattle was up $2.02 at $158.75 and April was $2.52 higher at $163.35. March feeders were $.45 higher at $183.92 and April was up $.72 at $188.27.

Direct cash cattle markets were quiet. The big feature was the distribution of the week’s show list, which looks larger in Texas, but smaller in Kansas, Nebraska, and Colorado. Bitterly cold conditions in some of the major feeding areas are expected to ease by midweek, which is about when this week’s trade could get underway. Last week’s trade in the south was mainly at $156 on the live basis, $1 higher than the previous week’s weighted average, and dressed business in the north was mostly at $248, steady on the week. Live trade in Nebraska was at $155 to $156, steady to $1 higher. Trade volume and formula totals were higher in Kansas and Nebraska, lower in Texas.

Boxed beef closed higher with moderate movement. Choice was up $.34 at $268.10 and Select beef was $.98 higher at $251.52. The estimated cattle slaughter of 126,000 head was up 2,000 on the week and 7,000 on the year.

At the Oklahoma National Stockyards feeder cattle sale, compared to the previous week, steers and heifers were not well tested due to a weekend winter storm bringing sleet and much colder temperatures to the area. There was an undertone of steady to $2 higher for feeder steers and heifers. Steer calves were steady to $3 higher and heifer calves weighing less than 500 pounds were up $8 to $10, while heifers over 500 pounds down $3, all in a light test. The USDA says weather limited movement and pulled receipts well below last week and last year. Still, demand was moderate to good for all classes. 60% of the run were steers and 59% of the total offering weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 600 to 700 pounds were reported at $185 to $195 and 700 to 800 pound steers brought $170 to $190. Medium and Large 1 feeder heifers weighing 500 to 600 pounds ranged from $165 to $180 and 600 to 700-pound heifers sold at $165 to $193.

Lean hog futures were mixed, mostly lower, on spread trade and long-term demand uncertainties. Part of those demand uncertainties are tied to pork exports with the industry waiting to see COVID rates in China as business resumes after the Lunar New Year holiday. February was down $.72 at $75.15 and April was up $.07 at $86.52.

Cash hogs were steady to lower with light negotiated numbers at the major direct markets. Most buyers have started the week bidding lower while looking at any potential short-term movement issues caused by the weather, the availability of market-ready numbers, and demand factors. Buyers continue to hold significant leverage over the market.

National direct barrows and gilts closed $.55 lower with a base price range of $64 to $72.50 for a weighted average of $70.08, with Iowa/Southern Minnesota down $1.03 at $70.49 and the Western Corn Belt $.96 lower, also at $70.49. The Eastern Corn Belt had no reported trend with a weighted average of $70.02.

Butcher hogs at the Midwest cash markets were $2 lower than the last reported test at $60. Illinois direct sows were steady at $30 to $42 on light to moderate demand and offerings. Barrows and gilts were steady at $54 to $64 with moderate demand for moderate offerings. Boars ranged from $10 to $20.

Pork closed $1.03 higher at $80.28. Picnics, ribs, and hams were firm to sharply higher, canceling out losses in loins, butts, and bellies. The estimated hog slaughter of 491,000 head was up 2,000 on the week and 14,000 on the year.

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