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Cattle futures lower ahead of widespread direct cash business

At the Chicago Mercantile Exchange, live cattle were lower and feeders closed mostly lower waiting for direct cash business to develop.  October lives closed $1.25 lower at $142.57 and December live cattle closed $1.32 lower at $148.47.  September feeders closed $.27 higher at $182.45 and October feeders closed $.20 higher at $183.47. 

There was another round of light direct cash cattle trade on Wednesday.  Deals in the South were at $141 live, $1 below last week’s business.  Deals in the North were at $227 and $228, $5 below last week’s weighted average basis in Nebraska.   There was some very light, scattered trade that took place on Tuesday with dressed deals at $230. More business is expected to develop over the balance of the week. Wednesday’s Fed Cattle Exchange was another non-starter with 1,204 head offered, none of which sold.  Reserve prices were at $141 to $142, which were not met.

At the Hub City Livestock Auction in South Dakota, there were very different weight classes offered and the only comparable offering was heifers 700 to 750 pounds, which were steady to $1 higher.  The USDA says demand was good for the day’s yearling offerings featuring several strings as well as many loads and packages. Cattle off grass were met with the best demand.  There were both yard and grass cattle offered, but with less variation in flesh and were mostly light to moderate plus.  Quality was average to attractive, with more attractive cattle offered this week.  The market was active.  Receipts were up on the week and the year.  Feeder supply included 22% steers and 99% of the offering was over 600 pounds.  Medium and Large 1 feeder steers 873 to 882 pounds brought $182.25 to $185.75 and feeder steers 988 to 994 pounds brought $176.50 to $185.50.  Medium and Large 1 feeder heifers 751 to 798 pounds brought $180 to $190.25 and feeder heifers 850 to 878 pounds brought $171.50 to $181. 

Boxed beef closed lower on light demand for solid offerings.  Choice closed $1.45 lower at $258.34 and Select closed $1.94 lower at $237.74.  The Choice/Select spread is $20.60. Estimated cattle slaughter is 125,000 head – up 1,000 on the week and up 6,000 on the year.

Lean hog futures closed lower on long-term demand uncertainties.  October lean hogs closed $2.07 lower at $91.52 and December lean hogs closed $1.62 lower at $83.87. 

Cash hogs closed lower with a solid negotiated run.  Processors have been moving decent numbers this week without having to aggressively bid up.  Strong demand for US pork on the global market and domestically has helped provide price support, but the long-term demand concerns do creep in and pressure prices.  The industry continues to monitor the availability of market-ready hogs.  Hog weights this week were at 276.9 pounds, up 0.4 on the week, but down 1.3 pounds on the year. Barrows and gilts at the National Daily Direct closed $2.02 lower with a base range of $96 to $112 and a weighted average of $104.81; the Iowa/Minnesota closed $3.73 lower with a weighted average of $108.66; the Western Corn Belt closed $.69 lower with a weighted average of $108.30.  Prices at the Eastern Corn Belt were not reported due to confidentiality. 

Butcher hog prices at the Midwest cash markets are steady at $70. At Illinois, slaughter sow prices were $1 lower with moderate demand for moderate offerings at $64 to $76.  Barrows and gilts were steady with moderate demand for moderate offerings at $75 to $84.  Boars ranged from $45 to $55 and $10 to $20. 

Pork values closed higher – up $1.03 at $103.19.  Bellies, butts, and loins were all higher.  Ribs, hams, and picnics were lower.Estimated hog slaughter 475,000 head – down 5,000 on the week and even on the year. 

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