Market News

Sharply lower hog futures drag cattle contracts lower: June 24, 2009

Chicago Mercantile Exchange live cattle contracts settled 20 to 85 points lower with sharp pressure from the hog complex limiting overall buying in the live pit. Spreaders sold August and bought June and October. Traders kept a watchful eye for cash trade development. June closed .20 lower at 81.65, and August was down .85 at 82.47. Boxed beef cutout values closed steady to firm on light demand. Choice beef was down .18 at 139.94, and select was .82 higher at 133.13.

Feeder cattle closed 50 to 122 points lower on technical selling. Spreaders sold August and bought September. August closed .75 lower at 98.95, and September was down 1.22 at 98.55.

Feeder cattle receipts at the Ozarks Regional Stockyards at West Plains, MO on Tuesday totaled 3500 head. Compared to last week feeder calves trended 2.00 to 4.00 lower, yearlings sold 1.00 to 3.00 higher. Steers, medium and large 1 weighing 500 to 600 lbs traded from 98.00 to 107.00, 7 to 8 weight steers brought 93.00 to 99.76. 500 to 600 pound heifers traded from 87.50 to 96.00 and 7 to 8 weights from 87.50 to 93.75.

Wednesday’s cattle slaughter was estimated at 130,000 head, the same as last week, but 3,000 more than last year.  USDA Mandatory reported trading was light in central and western Nebraska with moderate demand. Compared to last week, early live sales are steady at 80 to 81. The reported sales volume at mid-afternoon was 8,360 head.  Yet for the most part the country remains very quiet with show lists priced at 84 + in the South where they are bidding 79.00 live. In the Northern feedlot operators are asking 133 to 135, bids are at 128 to 130. In the final slaughter cattle sale at the Sioux Falls Stockyards slaughter steers, heifers and Holsteins were steady. Steers topped at 81.50 and heifers at 81.00.

Barrows and gilts at the terminals trended mostly steady with instances of .50 and 1.00 lower from 31.50 to 39.00. The Missouri direct base carcass meat price was steady from 49.00 to 53.00. Wednesday’s hog slaughter was estimated at 412,000 head, 8,000 more than last week, but 2,000 less than a year ago. Iowa/Minnesota barrows and gilts closed .10 higher at 57.64 on a carcass basis, the West was down .06 at 57.63, and the East was .31 lower at 55.04. Hot, humid weather continues to slow movement of hogs to market. Packer margins are poor and retail pork movement has been slow. Thursday’s market is expected to be steady to weak.

Lean hogs settled sharply lower in the 2009 contracts, however most 2010 contracts were higher. July had limit losses in the morning, but bounced back some near the close. There was some profit taking ahead of the quarterly hogs and pigs report due for release on Friday. July was down 2.82 at 57.30, and August was down 1.62 at 58.82.

Pork bellies settled limit lower in the front months. The pressure in the lean hog market and expectations that overall demand of all varieties will continue to remain slow kept most traders on the defensive. June ended at 60.20, and August at 61.30, both down 300 points.