Market News

USDA numbers hit cattle futures hard

Chicago Mercantile Exchange live cattle futures were sharply lower, responding to the much larger than expected placements figure in last week’s USDA cattle on feed report. If there was a positive in that set of numbers, it was marketings, which indicates feedlots are trying to stay current. Also, there was a lot more beef than expected in cold storage at the end of August. October was $2.35 lower at $109.22 and December was down the $3.00 daily limit at $114.42.

Feeder cattle futures were sharply lower, mostly limit down, also pressured by last week’s cattle on feed numbers. September was $2.92 lower at $150.47 and October was down $4.50 at $151.60.

Direct cash cattle markets were quiet with the day’s big feature the distribution of this week’s showlist. This week’s ready numbers look mixed, steady in the South, larger in Nebraska, smaller in Colorado, but nearly steady with last week. Asking prices could start out around $110 to $112 on the live basis, with widespread activity expected to wait until at least Wednesday. Last week, live trade in the South was mainly up $2 from the previous week, and business in the North was about $3 to $5 higher than the prior weighted average in Nebraska. Formula totals were weak to sharply lower, while total trade volume was mixed, higher in Nebraska, lower in Kansas and Texas.

Boxed beef closed sharply higher on moderate to good demand for light offerings. Choice was up $2.36 at $193.96 and Select was $2.16 higher at $190.89. The estimated cattle slaughter of 118,000 head was up 6,000 on the week and the year.

Last week in Nebraska, the USDA says lighter weight steer calves were unevenly steady and yearling feeder cattle were steady to $2 higher. Heifer calves were steady, except for heifers weighing more than 600 pounds, which were steady to $3 higher. Buyer demand was strong, with the on-site reporter comparing the demand to what occurred a couple of years ago when prices were at record highs. 54% of the weekly run were steers and almost 68% weighed more than 600 pounds. The total weekly run was up on the week and the year. Medium and Large 1 feeder steers weighing 500 to 599 pounds ranged from $160 to $189 and 900 to 1,000 pound steers brought $137 to $161.75. Medium and Large 1 feeder heifers weighing 500 to 600 pounds sold at $140 to $165 and 900 to 1,000 pound heifers were reported at $134.50 to $145.25.

Lean hog futures were mostly higher, with nearby contracts up on spread trade, the discount to cash, and the higher midday pork. Deferreds were down on that spread activity and expectations for even more pork to hit the market in the coming months. The USDA’s quarterly hogs and pigs report is out Thursday. October was up $.62 at $56.32 and December was $.80 higher at $57.42.

Cash hogs were steady to lower. Buyers continue to hold a lot of because of the more than ample market ready numbers and solid processing margins. Last week’s kill topped 2.5 million head with a string of record daily slaughters and the recently added pork plants aren’t even fully on-line yet.

Iowa/Southern Minnesota direct barrows and gilts closed $1.06 lower at $46 to $49 for a weighted average of $47.83, the Western Cornbelt was down $.90 at $44 to $49 with an average of $47.82, and national direct business was $.74 lower at $44 to $49 for an average of $47.75. Butcher hogs at the Midwest cash markets were steady to $2 lower at $31 to $36. Missouri direct butchers were $3 lower at $40 to $43 on light to moderate supply and demand. Sows were steady to $3 lower at $18 to $30. Illinois direct sows were steady at $23 to $32 on moderate demand for light to moderate offerings. Barrows and gilts were weak at $28 to $36 with moderate demand for moderate offerings. Boars ranged from $5 to $18.

Pork closed $.80 higher at $73.50. Loins and hams were lower, all other primals were higher, including at $3.23 gain in butts. The estimated hog slaughter Monday was a record 460,000 head, up 9,000 on the week and 18,000 on the year.