Market News

Moderate to sharp losses in cattle, hog contracts

Chicago Mercantile Exchange live cattle contracts settled 57 to 150 points lower following the sharp losses in the stock market as well as lower grain markets pressuring the deferred issues. Early 2010 contracts showed sharp losses as fundamental buying activity was nowhere to be seen early in the week. June closed .57 lower at 79.90, and August was down .77 at 80.82.Feeder cattle ended the session 17 to 80 points in the red. The weakness in the live cattle market along with losses in the corn futures market has most traders backing away from feeder cattle markets. Cash feeder markets are expected to show light to moderate weakness early in the week, although the lower feed costs could help to support overall placement levels and could create additional buying momentum according to DTN. August feeders ended .42 lower at 97.20, and September was down .17 at 97.40.

Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 10,500 head. Compared to last week feeder cattle and calves were lightly tested in the opening rounds and steady to 2.00 higher. Early demand was moderate to good. Feeder steers medium and large 1 weighing 550 to 600 lbs brought 114.00 to 115. 5 to 6 weight heifers traded at 95.00 to 105.00. Boxed beef cutout values were firm on choice and weak on select, with light to moderate demand and offerings. Choice boxed beef was up.73 at 139.52, and select was down .47 at 132.04.

Monday’s cattle slaughter was estimated at 130,000 head, 3,000 more than last week, and 6,000 greater than last year. Formula totals for last week were smaller in all areas especially Kansas and Nebraska. Accordingly, the total trade volume was also lower in all areas. New showlists appear to be generally larger than last week with the lone exception of Colorado. Initial asking prices are around 84 in the South and 134 in the North.

Monday’s hog slaughter was estimated at 410,000 head, 3,000 more than last week, and 11,000 greater than last year. There were too few hogs at the terminals to test the market. Missouri direct base carcass meat price was 1.00 lower to 1.00 higher from 48.00 to 52.00. Barrows and gilts in the Iowa/Minnesota direct trade closed .11 higher at 55.85 on a carcass basis, the West was unchanged at 55.91, and the East was .07 lower at 51.76.
Last week’s hog trade was choppy and DTN says, we could see more of the same this week. Country supplies may be narrowing a bit with the seasonal trend, but not enough to force greater packer spending. Tuesday’s market is projected to be about steady.

Lean hogs settled 140 to 217 points lower on the combination of bearish fundamentals and sharply lower grain markets weakening any buying activity in the December and February issues. Even though herd liquidations are expected to be seen and the idea is overall all numbers will be much shorter than current levels, traders remain bearish over the next 6 to 9 months. July settled 1.40 lower at 58.40, and August was down 1.67 at 58.40. Pork trading was slow with light to moderate demand and offerings. The lean carcass cutout was up .86 at 56.85.

Pork Bellies closed 45 higher to 40 lower with some fairly strong buying in the nearby’s. The sharp losses on Friday continued to be an overstatement of most traders’ expectations, so some additional market bounce back was seen. July was up .45 at 58.90, and August was down .40 at 58.75.