Market News

Feedlot cattle trade at sharply higher prices

It took until early afternoon on Friday before feedlot operators and short bought, margin stressed packers conducted any business. When they did, live cattle sales in the Texas Panhandle were 4.00 to 5.00 higher at 120.00 to mostly 121.00, Kansas sales were 5.00 higher at 121.00. Trading was active in Nebraska on moderate to good demand, with live sales 4.00 to 6.00 higher than last week at 120.00 to 122. Dressed sales in the North were 5.00 to 7.00 higher at 188.00 to 190.00. The weekly cattle slaughter was estimated at 677,000 head 14,000 more than last week, and 20,000 greater than  2010.

Boxed beef ended the day weak on light to moderate demand and moderate offerings. Choice beef was down .77 at 182.49, and select was up .07 at 169.14.

Chicago Mercantile Exchange live cattle contracts settled mixed on Friday, with the front months in the black and the deferreds in the red. The expectation of additional short term demand and potential long term supply growth caused the diversion in price movement according to DTN. Early reports of cash trading at sharply higher prices also supported the front months. But the bearish corn stocks report exerted additional pressure on the back months due to fears of increased cattle production as result of lower corn prices. October settled at 122.15 up 1.75, December live cattle ended at 122.65 up 1.40.

Feeder cattle settled sharply higher on the losses in the corn pit which can lead to lower production costs. October feeders were up 1.12 and settled at 140.52, November was 1.02 higher at 142.92.

Feeder cattle receipts at Missouri auctions this week totaled 27,327 head. Compared to last week, steers sold 1.00 to 3.00 higher with instances 3.00 to 5.00 higher on yearlings and some calves that were weaned and vaccinated. Heifers sold unevenly steady to 2.00 higher. Cattle markets found significant support following last Friday’s Cattle on Feed Report which showed August placements were much below everyone’s expectations. Feeder steers medium and large 1 weighing an average of 526 lbs brought 142.90 per hundredweight. 519 lb heifers traded at 120.89.

Lean hogs ended the session sharply higher on the continued rumors of increased shipments of pork to China. Advances in the deferred contracts were limited by the lower corn futures prices which could lead to increased hog production down the road. October lean hogs were up 3.00 at 93.37 and December settled at 87.80 up 1.82.

 The hog market was active on Friday, with good demand. Iowa/Minnesota direct trade barrows and gilts closed .12 lower at 90.36 carcass basis, the West was down 1.00 at 89.26, and the East closed 3.08 higher at 87.67. Missouri direct based carcass meat price was steady from 82.00 to 85.00.

Pork trading was slow to moderate with light to moderate demand and offerings. Pork carcass cutout value was down .02 at 98.06.

The weekly hog slaughter was estimated at 2,250,000 head, 39,000 less than last week, but 100,000 more than last year.

Though the September 1 breeding herd was only 1% larger than last year, sow productivity also remains very strong. Such a one-two combination indicates that pork production in 2012 will conservatively expand by 1% to 2%.