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Demand expectations support hog futures

Chicago Mercantile Exchange live cattle futures were higher, watching the distribution of this week’s showlist, with support from the midday boxed beef, feeder cattle, and the higher move in hogs. October was up $.22 at $113.67 and December was $.10 higher at $118.95.

Feeder cattle were higher on technical buying, with some contracts managing to break what had been overhead resistance. October was up $.47 at $158.65 and November was $.97 higher at $159.02.

Direct cash cattle markets were quiet. The day’s big features were the assessment of last week’s business and the distribution of this week’s showlist. Last week’s trade was light to moderate, mostly steady on the live basis and generally a dollar lower for dressed. Formula totals were mixed, up in Kansas and Texas, down in Nebraska, and trade volume totals were also mixed, higher in Texas, just about steady in Kansas, lower in Nebraska. This week’s showlist also looks mixed, larger in Texas, nearly unchanged in Colorado, and smaller in Kansas and Nebraska. Widespread direct business isn’t expected to get underway until the second half of the week. The U.S. and Canada reached a deal overnight preserving NAFTA, now known as the United States Mexico Canada Agreement or USMCA.

Boxed beef closed sharply higher on “fairly” good demand for light offerings. Choice was up $1.20 at $205.08 and Select was $1.19 higher at $194.63. The estimated cattle slaughter of 119,000 head was unchanged on the week and up 13,000 on the year.

At the Oklahoma National Stockyards feeder cattle sale Monday, steers trended $2 to $5 higher, with a weaker undertone on heifers. The USDA says demand is good, with very good demand for long weaned, heavier yearlings. The quality was average to attractive, with 63% of the run steers and 60% of the offering weighing more than 600 pounds. Medium and Large 1 feeder steers weighing 600 to 700 pounds were reported at $160 to $166 and 700 to 800-pound steers sold at $157 to $165.50. Medium and Large 1 feeder heifers weighing 500 to 600 pounds ranged from $153.50 to $161.50 and 600 to 700-pound heifers brought $150.75 to $158.

Lean hog futures were sharply higher, supported by follow-through commercial and technical buying from Friday on solid demand expectations as October Pork Month gets underway. Also, the most active contracts are at a discount to the cash index. October was $2.57 higher at $64.75 and December was up $1.92 at $59.85.

Cash hogs were steady to weak, with light to moderate closing negotiated numbers at the major direct markets. It was quiet start to the week, but buyers could raise bids if chain speed fails to stay at a high enough level. There’s a lot of product available, but this is October Pork Month, and the USMCA is also expected to be at least nominally positive for demand. The industry continues to monitor production capacity in the southeastern U.S. fully coming back on-line, along with the spread of African Swine Fever in China and parts of Europe. According to wire reports, China will ease some import tariffs November 1st, but pork was not on the list.

Pork closed $.97 higher at $81.05. Hams were down $1.20 and butts were steady, while the other primal cuts were firm to sharply higher, including a $6.17 gain in ribs. The estimated hog slaughter of 456,000 head was down 16,000 on the week, but up 16,000 on the year. Saturday’s kill was revised to 220,000 head, 8,000 less than the initial projection, putting last week’s total at 2.56 million head.

Iowa/Southern Minnesota direct barrows and gilts closed $.12 lower at $60 to $64 for a weighted average of $63.02, the Western Cornbelt was down $.08 at $58.50 to $64 with an average of $63.01, and national direct business was $.05 lower at $58.50 to $64 for an average of $63.05. Butcher hogs at the Midwest cash markets were steady at $40 to $48.

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