Market News

Demand concerns pressure hog futures

At the Chicago Mercantile Exchange, cattle futures remain overbought.  The lack of direction from the cash trade, weak wholesale values, and the less than stellar Fed Cattle Exchange added pressure to prices.  October live cattle closed $.77 lower at $113.20 and December live cattle closed $1.07 lower at $118.40.  October feeder cattle closed $1.20 lower at $157.87 and November feeder cattle closed $.80 lower at $158.77.

Direct cash cattle trade has been at a virtual standstill.  There were a few reported deals in Iowa on Wednesday.  Asking prices are holding steady at $114 to $115 live and $180-plus dressed. Bids aren’t evident yet.  It’s becoming more likely that a standoff will ensue, and significant business will be delayed until the last part of the week.

At the Bassett Livestock Auction in Nebraska, receipts are up from two weeks ago and down on the year.  Compared to the previous auction, steers 900 to 950 pounds were $4 to $5 higher and heifers 800 pounds were $2 lower.  The USDA says demand was good with several buyers and active internet bidding.  Feeder supply included 31 percent steers and 99 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 901 to 933 pounds brought $159 to $167 and feeder steers 953 to 970 pounds brought $160 to $162.10.  Medium and Large 1 feeder heifers 868 to 896 pounds brought $147.26 to $153 and feeder heifers 901 to 949 pounds brought $141.50 to $152.

Boxed beef cutout values closed weak to lower on light demand and moderate offerings.  Choice closed $.47 lower at $204.42 and Select closed $1.68 lower at $192.30.  The Choice/Select spread is $12.12.  Estimated cattle slaughter is 120,000 head – up 1,000 on the week and the year.

Lean hog futures closed mostly lower with the exception of the soon-expiring October contract.   Contracts were pressured by weaker cash trade and the ongoing supply and demand questions.  While the newly inked USMCA should eventually help firm up demand questions, Mexico has yet to lift tariffs on US pork products and the deal still has to make it through Congress.  October lean hogs closed $1.05 higher at $67.47 and December lean hogs closed $2.00 lower at $57.15.

Cash hogs closed weak with solid negotiated purchase totals. The average hog weights at the Iowa/Southern Minnesota jumped a pound and a half this week to 280 pounds, but it’s still 1.9 pounds lower than a year ago.  Weights are likely to continue to rise as large slaughter runs are anticipated.  The Southeast is still playing catch up from the shutdowns and lighter runs following Hurricane Florence.  The pork industry continues to monitor the African Swine Fever situation – a disruption to China’s production and supply could create additional opportunities for US pork on the global market. Barrows and gilts at the Iowa/Southern Minnesota closed $.29 lower with a range of $58 to $64.90 for a weighted average of $63.41; the Western Corn Belt closed $.23 lower with a range of $58 to $64.90 for a weighted average of $63.42; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.19 lower with a range of $58 to $64.90 for a weighted average of $63.32.

Butcher hogs at the Midwest cash markets are steady – $40 at Zumbrota, Minnesota; $42 at Red Oak, Iowa; and $48 at Dorchester, Wisconsin.  The Garnavillo, Iowa market is closed this week.  At Illinois, slaughter sow receipts are up on the week and down on the year.  Prices are firm at $21 to $32 with moderate demand for moderate to heavy offerings.  Barrows and gilts are steady at $37 to $45 with moderate demand for moderate offerings.

Pork cutout values closed steady – down $.11 at $80.37.  The primals ended the day mixed with losses in the loins, ribs, and hams.  Bellies, picnics, and butts all closed firm.  Estimated hog slaughter is 473,000 head – up 3,000 on the week and 12,000 on the year.