Market News

Live and feeder cattle close sharply higher on short covering: June 29, 2009

Chicago Mercantile Exchange live cattle contracts settled 100 to 300 points higher on a flurry of technical buying, short covering and the triggering of buy stops. Contracts moved above 100 day moving averages, spooking non-commercials to cover shorts according to DTN.  June finished 2.15 higher at 84.62, and August was up the 3.00 limit at 85.40. Boxed beef cutout values were firm on moderate demand and offerings. Choice beef ended .60 higher at 139.53, select was up .85 at 133.15

Feeder cattle closed sharply higher following the lead of the live pit and buy stops. This surge in futures prices may help to spur additional buying activity in the cash markets through the holiday shortened week. August settled at 101.72 up 2.75, and August was up 2.72 at 101.70.

Feeder cattle receipts at the Oklahoma National Stockyards totaled 11,500 head on Monday. Feeder steers and heifers were steady to 2.00 higher at midsession. Demand was very good for feeders. Steer and heifer calves were steady to 2.00 higher in a light test. Feeder steers medium and large 1, 700 to 750 pounds traded from 100.00 to 104.00, the same weight heifers from 94.75 to 97.50 per hundredweight.

Cattle slaughter on Monday was estimated at 130,000 head, the same as last week and last year. Formula totals for last week were smaller in Kansas and Texas, but a bit larger in Nebraska. Total trade volume totals turned out to be larger in Kansas, but smaller in Nebraska and Texas. The new show lists appear to be larger in all states except Nebraska. Early asking prices are around 84 to 85 in the South, and 133 to 135 in the North.

Monday’s hog slaughter was estimated at 408, 000 head, 7,000 more than last week, but 17,000 less than last year. Barrows and gilts at the terminals were steady to a dollar lower in a light Monday test from 33.50 to 41.00. The Missouri direct base carcass meat price closed steady from 49.00 to 53.00. Iowa/Minnesota hogs closed .23 higher at 57.27 on a carcass basis, the West was up .01 at 57.29, and the East was .73 lower closing at 54.41. Last week’s hog slaughter was five-percent smaller than last year and the smallest non holiday kill since August of 2007. Such a cutback coupled with the holiday production ahead could work to give carcass value a shot in the arm. Tuesday’s market looks to be steady to weak.

Lean hogs settled 132 points higher to 65 lower. The front months staged a rally but the deferred issues ended lower. The overall fundamentals of the market remain weak with overall pork demand sluggish at best heading into the holiday weekend. The quarterly hogs and pigs report was pretty much ignored as numbers came in much as expected.  July ended 1.32 higher at 58.02, and August was up .92 at 58.62. Pork trading was slow with light demand and mostly moderate offerings. Pork carcass cutout was up .49 at 55.77.

Pork bellies closed 150 to 300 points lower. The market continues to show bearish tendencies and traders appear to be hesitant to step in at the present time. July bellies ended at 56.00 down 2.40, and August was down 2.20 at 57.45.