Market News

Limit gains in cattle futures

Cattle country was quiet on Monday afternoon following the distribution of the new showlists. The pre-Christmas fed offering seems to be mixed, smaller in the South and some larger in the North. Asking prices are not well defined so far, thanks in no small part to the way cattle futures screamed higher. With such explosive bullishness suddenly on the horizon, feedlot managers are understandably cautious about pricing cattle too early or too cheap. If the board continues to erupt, the timing of this week’s cash trade becomes more difficult to predict. Yet the assumption may be made both sides would like to complete business by midweek. The Monday cattle kill is estimated at 114,000 head, 2,000 more than last week, and even with last year.

Boxed beef cutout values were sharply lower on light to moderate demand and moderate to heavy offerings. Choice beef was down 2.86 at 191.28, and select was 2.42 lower at 183.93.

Live cattle contracts on the Chicago Mercantile Exchange started the day with expanded limit gains and finished 222 to 450 points higher. The February and April contracts remained locked limit higher through the close. This created additional market momentum through the entire complex which may bring more buyer support as the week continues.

Feeder cattle ended 525 to 675 points higher, and most contracts held on to expanded limit gains through much of the session This support continued to create some significant market support and put distance from the market lows, which could help to establish a new trading range through the month of January. Even though there was little trade at these price levels, the potential to draw more aggressive buyer support to the market over the coming days due to the limit higher gains may spark some additional market interest through the entire complex according to DTN analysts.

Feeder cattle receipts at the Joplin, Missouri Regional Stockyards totaled 2600 head on Monday. Compared to last week, steer calves under 500 pounds and heifer claves less than 550 pounds were 15.00 to 20.00 higher. Steers weighing 500 to 700 pounds and heifers over 550 pounds were 10.00 to 15.00 higher, steers over 700 pounds firm to 5.00 higher Demand was good on a light supply. Feeder steers medium and large 1 weighing 500 to 600 pounds traded from 161.00 to 196.00 per hundredweight. 5 to 6 weight heifers brought 139.00 to 167.50.

Lean hogs settled 70 to 120 points in the red after seeing some light buyer support following the aggressive surge higher which flooded into the cattle complex. However hogs were unable to hold on to the gains and closed lower across the board. The greatest losses were in the fall and early winter futures.

There was slow market activity and demand in the hogs on Monday. Barrows and gilts in the Iowa/Minnesota direct trade closed .57 higher at 49.59 weighted average on a carcass basis, the West was up. 65 at 49.57, and the national report was .11 lower at 48.54. Missouri direct base carcass meat price closed steady to 2.00 lower from 39.00 to 43.00.

The pork carcass cutout value was up .31 at 71.81 FOB plant.

Last week’s hog slaughter totaled a record 2.493 million head, up 2.8% from the previous week, up 7.7% from the same week last year, and up .9% from the old record of 2,469,770 head slaughtered during the week ending on December 22, 2007. The December kill has been a monster. Are there more hogs out there, perhaps both on the finishing floor and in the breeding barn than officially recognized?

The Monday hog kill was estimated at 445,000 head, 4,000 more than last week and last year.