Cattle country remained very quiet on Friday afternoon as buyers continued to resist moving toward higher asking prices. Clearly packers are trying to preserve processing margins by holding the cost of the live inventory near steady. Needless to say bullish minded producers disagree with that objective. Asking prices remain firm at 121.00 in the South and 190.00 plus in the North. The weekly cattle kill at 639,000 head is 8,000 less than the previous week, and 26,000 under 2011.
Boxed beef cutout values were higher on moderate demand and light to moderate offerings. Choice boxed beef was up 2.43 at 184.95, and select was 1.02 higher at 177.65.
Live cattle contracts closed mostly lower on the Chicago Mercantile Exchange on Friday. The August contract was pressured by lackluster packer spending and cash uncertainty. Deferred contracts traded firm much of the session, supported by ideas that the smaller corn crop will mean significant cuts in 2013 meat production. August was down .82 at 120.60, and October was .25 lower at 125.52.
Feeder cattle ended the session moderately higher despite the fact the August crop production report came in nearly 200 million bushels below the average trade guesstimate. Normally you would think such a bullish corn outlook would pressure feeder prices. However, the lackluster response by corn traders seemed to support prices in the feeder pit according to John Harrington at DTN. August feeders settled .37 higher at 139.47, and September was up .25 at 139.72.
Feeder cattle receipts at Missouri auctions this week totaled 18,361 head. Compared to the previous week, feeder calves sold 5.00 to 10.00 higher with some spots of 12.00 to 15.00 higher, yearlings sold steady to 5.00 higher with instances of up to 10.00 higher. The feeder supply was moderate. It was only the second time since mid-May that receipts fell below the year ago numbers as drought sales have forced many producers to market feeders earlier than usual. Demand was moderate to good. Feeder steers, medium and large 1 averaging 523 lbs. brought 147.98 per hundredweight. 576 lb. heifers averaged 132.32.
Sow slaughter in the week ending July 28 totaled 62,500 head, 5.5% more than 2011 and the largest weekly total seen this year. This represents further proof that herd liquidation is in high gear, a downshifting that bodes well for smaller production and higher prices in 2013, according to DTN.
Lean hogs settled 75 points higher to 42 lower. The August contract, scheduled to expire next week was supported much of the session by the premium of the cash index. Fourth quarter contracts traded slightly lower while far deferred contracts traded higher due to the implications of herd liquidation and ideas of smaller pork production next year. August settled unchanged at 91.87, and October was down .42 at 75.52.
There was moderate market activity with light to moderate demand in the hogs on Friday. Barrows and gilts in the Iowa/Minnesota direct trade closed 2.14 lower at 87.84 on a carcass basis, the West was down 2.25 at 87.91, and the East was up .61 at 86.07. Missouri direct base carcass meat price closed steady from 84.00 to 86.00. Terminal hogs closed steady to 1.00 higher from 57.00 to 61.00.
Pork trading was very slow, with light to moderate demand and offerings. Pork carcass value was down .11 at 92.69.
The weekly hog slaughter was estimated at 2,031,000 head, 6,000 more than last week, but 10,000 less than last year.