Market News

Outside market bearishness is negative to live cattle contracts: June 30, 2009

Chicago Mercantile Exchange live cattle contracts settled 15 to 210 points lower on bearishness in the outside markets along with profit taking. The June contract was down the most and expired at noon. Sharply lower corn values added additional pressure to the deferred contracts. June went off the board at 82.52 down 2.10 and August was down .15 at 85.25. Boxed beef cutout values were generally steady on moderate demand and offerings. Choice boxed beef was down .16 at 139.37, and select was .04 lower at 133.11

Feeder cattle closed 10 to 110 points higher on support from higher prices at early week feeder auctions. Lower corn values were also supportive. August was up 1.10 at 102.82, and September was up .10 at 101.80.

Feeder cattle receipts at the Joplin Regional Stockyards, Joplin, MO on Monday totaled 5238 head. Compared to last week calves trended steady to 2.00 lower and yearlings were steady to 2.00 higher. Feeder steers medium and large 1 and 1-2 weighing 500 to 600 lbs traded from 94.00 to 112.00, 7 to 8 weights from 94.00 to 103.74. Feeder heifers weighing 500 to 600 lbs brought 85.00 to 100.00 and 7 to 8 weights from 86.00 to 94.25 per hundredweight.

Tuesday’s cattle slaughter was estimated at 130,000 head, 1,000 more than last week, and 2,000 greater than a year ago.  Feedlot trade was inactive on Tuesday with business expected to be delayed until Wednesday or Thursday. Feeders had been looking for higher prices this week based on Monday’s higher futures; today’s futures action may change their expectations. Asking prices are generally 84 to 85 South where there were a few bids at 81.00 according to private sources. Feedlot operators in the North are asking 133 to 135.

Hog slaughter was estimated at 417,000 head, 5,000 more than last week, but 13,000 less than last year. Barrows and gilts at the terminals trended steady to an instance of .50 higher from 33 to 41 on a live basis. Missouri direct base carcass meat price closed steady to 1.00 lower from 48.00 to 53.00. Iowa/Minnesota barrows and gilts closed .25 lower at 56.58 on a carcass basis, the West was unchanged at 57.23, and the East was .17 lower closing at 54.26. Processing and producer margins remain poor, but apparently not bad enough for packers to cut chain speed over country offerings. DTN’s John Harrington says sow prices seem to be leveling off a bit, still softening but at a lower rate. Tuesday’s market is expected to remain steady to weak.

Lean hogs settled mixed, from 202 higher to 220 points lower with the July 2009 through February 2010 contracts showing gains. Deferred months were in the red partly due to the losses in the corn market. The nearby’s found support from end of the month and end of the quarter position squaring as traders close the books on the last trading day of June. July was up .65 at 58.67, and August settled 2.02 higher at 60.65. Pork trading was slow to moderate, with very light to light demand and mostly moderate offerings. The lean carcass cutout was down 1.72 at 54.05.

Pork bellies closed lower.  July bellies were down 1.70 at 54.30 and August was down 1.75 at 55.70.