Market News

Lean hogs higher on short covering

At the Chicago Mercantile Exchange, cattle futures closed mixed unable to find any direction from the light cash trade.  Softer wholesale beef values also added pressure.  October live cattle closed $.17 higher at $113.80 and December live cattle closed $.22 lower at $118.15.  October feeder cattle closed $.80 higher at $157.77 and November feeder cattle closed $.47 higher at $158.77.

Direct cash cattle trade was light.  Dressed business was fully steady with yesterday and $1 higher than last week’s weighted average basis in Nebraska.  Trade in the South was light, with deals in Kansas and Texas at $111 live and fully steady with last week’s weighted averages.

At the Herreid Livestock Market in South Dakota, receipts are up on the week.  The weight classes were different, so a comparable trend could not be established.  Demand was good to very good for many strings, loads, and packages that made up the yearling offerings.  Flesh varied as cattle came off both yards and off of grass.  Quality was average to attractive.  Feeder supply was 72 percent steers and 99 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 750 to 764 pounds brought $164.75 to $168.50 and feeder steers 903 to 932 pounds brought $154.50 to $164.  Medium and Large 1 feeder heifers 674 to 689 pounds brought $166.25 to $168 and feeder heifers 904 to 915 brought $138 to $144.

At the Missouri Hay Market, there has been a slight increase in hay being offered as fall haying has added to the overall supply.  Hay prices are mostly steady, although there is still some weakness noted in the market.  Hay demand is moderate.  Supreme quality alfalfa brought $180 to $250, small squares brought $7 to $9 per bale.  Premium quality alfalfa brought $160 to $200 and good quality alfalfa brought $120 to $160, small squares brought $5 to $7 and fair quality alfalfa brought $100 to $120.  Good quality mixed grass hay brought $100 to $175 and small squares brought $5 to $7 per bale.  Fair to good quality mixed grass hay brought $80 to $150 and small squares brought $4 to $5.50 per bale.  Good quality bromegrass brought $120 to $150 and fair to good quality bromegrass brought $60 to $100.

Boxed beef cutout values closed steady to weak on light to moderate demand and moderate offerings.  Choice down $.61 at $203.25 and Select closed $.24 lower at $191.74.  The Choice/Select spread ended at $11.51.  Estimated cattle slaughter is 108,000 head – down 11,000 on the week and 4,000 on the year. Saturday’s estimated kill is 57,000 head – up 4,000 on the week and down 5,000 on the year.

Lean hog futures finished the week strong on short covering.  Today’s cash business was also supportive.  Deferred contracts rebounded nicely today.  The newly inked USMCA will eventually help to shore up certainty in the market, but the near-term demand picture is still shaky.  Especially as Mexico has yet to lift its 20 percent tariff on US pork.  December lean hogs closed $2.22 higher at $57.55 and February lean hogs closed $1.92 higher at $66.65.

Cash hogs closed higher with moderate negotiated purchase totals.  The nearby supply/demand picture is still uncertain.  We’ve seen huge slaughter runs this week at higher weights as the Southeast works to make up for the slowdown following Hurricane Florence.  That’s a lot pork entering a market that is already saturated.  The USMCA should eventually provide some price support, but Mexico has yet to lift its 20 percent tariff on US pork.  Barrows and gilts at the Iowa/Southern Minnesota closed $1.03 higher with a range of $60.50 to to $65.25 for a weighted average of $64.27; the Western Corn Belt closed $.84 higher with a range of $58 to $65.25 for a weighted average of $64.04; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.40 higher with a range of $58 to $65.25 for a weighted average of $63.63.

Butcher hogs at the Midwest cash markets are steady at $48 at Dorchester, Wisconsin.  At Illinois, slaughter sow receipts are down on the week and up on the year.  Prices are $1 higher at $22 to $34 with moderate demand for light to moderate offerings.  Barrows and gilts are $1 higher at $37 to $46 with moderate demand for moderate offerings.

The USDA says early-weaned pigs were steady.  All feeder pigs were $3.00 per head higher. Demand was moderate on moderate offerings.  Receipts included 50 percent formulated prices.  Total composite formula rage was $31.50 to $44.00 with an average of $40.23.  Total composite cash range was $20 to $40 with a weighted average of $35.23.  The average for all early weaned pigs was $37.95 and the average for all feeder pigs was $40.34.

Pork cutout values closed weak – down $.35 at $79.46. The primals are mixed with the ribs and hams sharply lower.  Butts were steady and picnics and bellies were sharply higher.  Estimated hog slaughter is 461,000 head – up 4,000 on the week and 1,000 on the year.  Saturday’s estimated kill is 181,000 head down 39,000 on the week and down 53,000 on the year.