Market News

Cash cattle trade is slow to develop

It may be late in the week before we see significant trade in the cash cattle market. Margin stressed packers are trying to hold the line on spending while feedlot operators who are also losing money attempt to sell cattle at higher prices. Some industry experts are predicting slower chain speed as packers attempt to offset losses. Asking prices are around 123.00 to 124.00 live, and 193.00 to 195.00 on the dressed. Tuesday’s cattle kill was estimated at 131,000 head, even with last week, but 1,000 more than last year.

Boxed beef values were generally steady on light to moderate demand and offerings. Choice beef was up .09 at 184.99, and select was unchanged at 169.47.

Live cattle contracts settled 40 to 135 points higher on the Chicago Mercantile Exchange on Tuesday. Traders reentered the market following Monday’s sharp selloff. The most significant gains developed in the October and December contracts. Support in the market came from ideas that that supplies are getting tighter. October settled 1.35 higher at 121.37, and December was up 1.27 at 121.60.

Feeder cattle ended the session unchanged to 45 points higher with only the spot October in the red. Higher corn values weighed on feeder futures while some support was seen in the feeder market from the live pit. October ended the session .52 lower at 138.47, and November was unchanged at 143.12.

Feeder cattle receipts at the Valentine, Nebraska Livestock Auction totaled 5930 head on Monday. There is no comparable market from last week’s bawling calf auction, but steady to 4.00 higher than two weeks ago. Demand was good for most offerings with many buyers in the seats. Feeder steers medium and large 1; 684 head weighing 914 lbs traded at an average of 133.26 per hundredweight. 410 heifers averaging 888 pounds brought 128.52.

Lean hogs settled 15 higher to 97 points lower due to a lack of active trade in the front month contracts. Lower cash prices weighed on futures and there continues to be some concern in the market over the outlook for continuing strong export markets.  Sharply higher corn prices helped to support the deferred months on ideas higher feed costs could limit production increases. October was down .90 at 92.12, and December was down .97 at 86.77.

The hog market activity was moderate with light to moderate demand. Iowa /Minnesota barrows and gilts closed .03 higher at 91.50 on a carcass basis, the West was down .27 and the East was 1.47 lower with both at 90.79. Missouri direct base carcass meat price closed steady from 86.00 to 87.00. Terminal butcher hogs closed steady to 1.00 lower from 61.00 to 64.00.

Pork trading was slow to moderate, with light to moderate demand and offerings. Pork carcass cutout value was .64 lower at 96.92.

Tuesday’s hog slaughter was estimated at 431,000 head, 10,000 more than last week, and 13,000 greater than 2010. Most packers are in good shape with numbers to finish out the week; however a few may need to purchase additional hogs to fund a Saturday slaughter that is expected to be around 150,000 head. The cash market is expected to be weak to lower on Wednesday and that softness could remain in the market the remainder of the week.

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