Market News

Cattle futures supported by direct business

Chicago Mercantile Exchange live and feeder cattle futures were sharply higher, supported by the direct cash cattle business during the session. That helped contracts shrug off the mixed midday move in beef. Feeders did pick up some additional support from the modestly lower corn. Beef export sales were up modestly on the week, mainly to South Korea, China, and Japan. February live was up $2.37 at $177.72 and April was $2.35 higher at $180.70. March feeders were $4.40 higher at $238.17 and April was up $4.12 at $243.92.

Direct cash cattle business got underway in the major feeding areas by early Thursday afternoon, picking up steam fairly quickly after the recent light, weather affected activity. Business was primarily at $175 on the live basis in the south, up $2 on the week, with a range of $174 to $177 across all regions. Dressed sales were mostly at $277, $3 higher, with a few sales as high as $279 dressed to a regional buyer in Nebraska. Asking prices for what was left on the show list were $176 live and $278 dressed, with some clean-up business possible to end the week.

At the Woodward Livestock Auction feeder cattle sale in Oklahoma, compared to the previous week, steers were mostly $6 to $10 higher, with instances of $20 higher, while heifers were up $7 to $10. Steer and heifer calves were $10 to $20 higher. The USDA says demand was moderate to active for an average quality offering, with receipts up on the week and the year. 52% of the offering were feeder heifers and 67% of the total run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 550 to 650 pounds were reported at $261 to $299 and 650-to-750-pound steers brought $230 to $265. Medium and Large 1 feeder heifers weighing 600 to 700 pounds ranged from $216.25 to $261 and 700 to 800-pound heifers sold at $206 to $223.

Boxed beef closed mixed with good movement. Choice was down $.82 at $298.68 and Select beef was up $.61 at $287.85 for a spread of $10.83. The estimated cattle slaughter of 126,000 head was up 5,000 on the week and 1,602 on the year.

Lean hog futures were mixed, mostly modestly higher, with winter through summer contracts up on spread trade and near-term demand expectations. The fundamentals during the session were also friendly. Export sales were a little bit lower than last week, but also solid, primarily to Mexico and Japan. February live was up $.40 at $74.30 and April was $.52 higher at $82.55.

Cash hogs were steady to higher with light negotiated movement at the major direct markets. Many buyers had to raise their bids to move apparently scant supplies and stay current. Wholesale business continues to largely perform better than expected, indicating solid domestic demand, but there are a lot of questions about whether or not that demand is going to hold. Friday’s business will depend on whether or not buyers need to secure more near-term supplies or if they’ve hit their needs for the week.

National direct barrows and gilts closed $1.53 higher with a base price range of $45 to $60 for a weighted average of $54.63, while Iowa/Southern Minnesota was up $1.25 at $55.26 and the Western Corn Belt was $.62 higher at $54.63. The Eastern Corn Belt was not reported due to confidentiality with a five-day rolling average of $49.44. Midwest butcher hogs were steady at $39. Illinois direct sows were steady at $23 to $35 on moderate demand for moderate to heavy offerings. Barrows and gilts were steady at $24 to $34 with moderate demand and offerings. Boars ranged from $5 to $20.

Pork closed $.05 higher at $88.91. Butts, ribs, and bellies were firm to sharply higher, with loins, picnics, and hams weak to modestly lower. The estimated hog slaughter of 480,000 head was down 4,000 on the week and 7,622 on the year.