Market News
Hog futures pressured by supply concerns
At the Chicago Mercantile Exchange, cattle futures ended the day higher ahead of widespread direct business in advance of Friday’s Cattle on Feed report. October live cattle closed $.62 higher at $113.07 and December contracts closed $.55 higher at $118.45. September feeder cattle closed $1.27 higher at $156.95 and October feeder cattle closed $.80 higher at $158.07.
A light trade finally developed in the South on Friday following the Cattle on Feed report. Live deals were at mostly $111, steady with last week’s weighted average. Heading into the end of the day Friday dressed business was still quiet with bids at $174 to $175.
At the Ogallala Livestock Auction in Nebraska, receipts are up on the year. Compared to two weeks ago steers over 750 pounds sold $3 to $5 higher and heifers over 700 pounds sold steady to $5 higher. The USDA says demand was good from the buyers in the crowd and online. Feeder supply included 27 percent steers and 94 percent of the offering was over 600 pounds. Medium and Large 1 feeder steers 708 to 736 pounds brought $162.50 to $168 and feeder steers 752 to 796 pounds brought $158 to $168. Medium and Large 1 feeder heifers 707 to 745 pounds brought $150 to $161.50 and feeder heifers 801 to 849 pounds brought $142.50 to $153.50.
At the Iowa Hay Market, the hay supply is mixed. Some portions of the state are on their 4th cutting of hay this year, while other areas have struggled to make the 2nd. Drought conditions have worsened in southeast Iowa, where extreme drought (D3) increased to more than 2 percent of the state. Small squares continue to be difficult to find, while large rounds are plentiful. Premium grade hay has also been difficult to find. Alfalfa premium small square brought $270 to $300 and alfalfa/grass premium large squares brought $200 to $250 and small squares $240 to $270. Grass premium small squares brought $200 to $240 and good large rounds brought $145 to $185 and small squares brought $140 to $175.
Boxed beef cutout values closed steady to firm on light to moderate demand and offerings. Choice up $.28 at $204.80 and Select down $.20 at $194.71. The Choice/Select spread is $10.09. Estimated cattle slaughter is 119,000, even on the week and up 4,000 on the year. Saturday’s estimated kill is 65,000 head – up 8,000 on the week and up 6,000 on the year.
Lean hog futures closed lower on profit taking and pressure from the cash trade and wholesale values at midday. The market is cautious as supply concerns linger ahead of next week’s quarterly Hogs and Pigs report and as processing facilities continue to ramp up production following Hurricane Florence. October lean hogs closed $.95 lower at $60.30 and December lean hogs closed $.87 lower at $57.40.
Cash hogs turned around from the open and ended the day higher with strong negotiated purchase numbers. Processing facilities in North Carolina still aren’t running at full capacity which has been supportive to prices. However, when it does finally ramp up, look for some supply concerns to reenter the market as hog weights will likely be heavier adding more meat to a market that is saturated and has faced demand uncertainties. The industry continues to watch the African Swine Fever situation in China. Another case has been found, this time in the northeast province of Jilin. Barrows and gilts at the Iowa/Southern Minnesota closed $1.04 higher with a range of $52 to $62 and for a weighted average of $60.24; the Western Corn Belt closed $.99 higher with a range of $52 to $62 for a weighted average of $60.14 ; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $1 higher with a range of $52 to $65 for a weighted average of $59.37.
The USDA says early-weaned pigs were $5.00 per head higher. All feeder pigs were $4.00 per head higher. Demand was good to moderate for moderate offerings. Receipts included 38 percent formulated prices. Total composite formula rage was $35.33 to $44.00 with an average of $39.80. Total composite cash range was $18.00 to $38.00 with a weighted average of $33.37. The average for all early weaned pigs was $36.13 and the average for all feeder pigs was $35.25.
The Midwest cash markets are closed today. At Illinois, slaughter sow receipts are up on the week and the year. Prices were steady at $16 to $29 with light to moderate demand for moderate offerings. Barrows and gilts were $2 higher at $29 to $42 with moderate demand for moderate offerings.
Pork cutout values closed steady – up $.23 at $79.18. The primals were mixed with gains in the bellies, picnics, hams, and ribs. The loins and butts were lower. Estimated hog slaughter is 442,000 head – up 40,000 on the week and down 8,000 on the year. Saturday’s estimated kill is 190,000 head, up 26,000 on the week and down 39,000 on the year.
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