Market News

Wholesale values pressure cattle futures

At the Chicago Mercantile Exchange, cattle futures closed mostly lower under pressure from declining beef values and mixed cash business.  October live cattle closed $.42 lower at $113.62 and December live cattle closed $.02 lower at $118.37.  October feeder cattle closed $.90 lower at $156.92 and November feeder cattle closed $1.02 lower at $157.75.

Direct cash cattle trade has improved.  A light trade has been reported in parts of the North with dressed deals at $175, $1 higher than last week’s weighted average basis in Nebraska.  Live business in Iowa was reported at $110, steady with last week.  We’ll likely see clean-up business in the North on Friday, but there’s still some work to be done in the South.  Asking prices are firm at $113 to $114 live and $180-plus dressed.

At the Mitchell Livestock Auction, receipts are down on the week and up on the year.  Compared to last week, feeder steers were mostly steady with instances of $2 higher on steers over 1000 pounds.  Feeder heifers under 900 pounds were $2 to $4 higher with heifers over 900 pounds steady.  The USDA says demand was good and the quality was varied.  The low cost of feed has buyers increasing their interest in yearlings.  Feeder supply included 41 percent steers and 98 percent of the offering was over 60 pounds.  Medium and large 1 feeder steers 907 to 940 pounds brought $150 to $157.35 and feeder heifers 850 to 899 pounds brought $142.25 to $147.60.

Boxed beef cutout values closed weak on light to moderate demand and offerings.  Choice down $.56 at $203.86 and Select was $.32 lower at $191.98.  The Choice/Select spread closed at $11.88.  Estimated cattle slaughter is 120,000 head – even on the week and up 2,000 on the year.

Lean hog futures closed lower on weakening cash business.  Demand worries continue as there’s still uncertainty with the large amount of pork entering the market.  While the USMCA has been agreed to – it still needs to make its way through Congress and to the President’s desk and Mexico needs to lift its 20 percent tariff on US pork products.  October lean hogs closed $.02 higher at $67.50 and December lean hogs closed $1.82 lower at $55.32.

Cash hogs closed weak with strong negotiated purchase numbers.  We’ve seen markets pull back a little bit recently.  Hog weights are rising, and slaughter runs have been massive.  That’s a lot of pork to enter the market, especially as there is ongoing supply/demand uncertainty.  The market is still watching the African Swine Fever situation in China.  If there is a market disruption there, it could open the door for more US pork to enter the global market.  But the lack of certainty doesn’t give the markets much solid ground to make any moves.  Barrows and gilts at the Iowa/Southern Minnesota closed $.26 lower with a range of $58.50 to $65 for a weighted average of $63.39; the Western Corn Belt closed $.18 lower with a range of $58.50 to $63.36 for a weighted average of $63.42; the Eastern Corn Belt had no comparison with range $60 to $64 with a weighted average of $63.25; and the National Daily Direct closed $.11 lower with a range of $58.50 to $65 for a weighted average of $63.30.

Butcher hogs at the Midwest cash markets are steady at $40 and $48.  At Illinois, slaughter sow receipts are drastically lower from last week with prices $1 higher at $21 to $33 on moderate demand for moderate offerings.  Barrows and gilts are steady at $37 to $45 with moderate demand for moderate offerings.

Pork cutout values closed lower – down $.46 at $79.91.  The ribs and picnics were sharply lower, but the bellies closed $2.67 higher. Estimated hog slaughter is 470,000 head – up 1,000 on the week and 7,000 on the year.