DTN says that the only sound in cattle country on Tuesday afternoon was that of rising feedlot expectations, thanks to impressive strength in futures and beef cutouts. Yet as asking prices firm to 126.00 to 127.00 in the South and 195.00 plus in the North, packer margins remain well in the red. Defensive buyers probably mean that significant trade volume will be delayed until late in the week. Cattle slaughter was estimated at 127,000 head, 2,000 more than last week, but 3,000 less than last year.
Boxed beef cutout values were firm on moderate demand and light to moderate offerings. Choice boxed beef is up .63 at 191.20, and select was .87 higher at 177.29.
Chicago Mercantile Exchange live cattle contracts settled 5 to 135 points higher on Tuesday. Strong support quickly jumped into the front month contract after first notice day on Monday. This pushed prices over $1.00 a hundredweight through most of the morning, and helped to sustain the early trade support. Although trade volume was light, the complex remained firm with expectations of cash market support while boxed beef values have improved. October settled 1.35 higher at 124.70, and December was up .32 at 126.72.
Feeder cattle settled narrowly mixed in an extremely sluggish trade with prices 40 points higher to 20 lower. The lack of activity in the outside markets added to the lackluster interest in feeder cattle futures, especially as corn prices slipped from early highs and remained contained in a narrow range. October was .12 lower and settled at 144.70, November was up .40 at 146.70.
Feeder cattle receipts at the Joplin, Missouri Regional Stockyards totaled 3895 head. Compared to last week, steer and heifer calves and yearlings were steady to 3.00 higher, except 450 to 600 lb. steer calves 4.00 to 6.00 higher following last week’s sharply lower trade. Demand was moderate to good on a moderate supply. Feeder steers, medium and large 1 weighing 526 lbs. brought 157.23 per hundredweight. 527 lb. heifers traded at 137.08.
Lean hogs ended the session 30 to 112 points higher with only December lower. Trade volume was light, but the market was able to erase early losses following the ability for live cattle contracts to hold initial support. The in ability for the initial losses to gain momentum and additional liquidation through nearby and deferred futures seemed to create short term support levels, allowing for the light noncommercial buyer interest to redevelop. October settled .42 higher at 81.90, and December was down .07 at 76.80.
There was slow market activity with moderate demand in the hogs on Tuesday. Barrows and gilts in the Iowa/Minnesota direct trade closed .56 higher at 80.90 on the carcass basis, the West was up .91 at 80.61, and the East was .08 higher at 78.88. Missouri direct base carcass meat price closed steady to 5.00 higher from 73.00 to 78.00. Terminal hogs were steady to 2.00 higher from 50.00 to 56.50.
Pork trading was slow to moderate, with light to moderate demand and mostly light offerings. Pork carcass cutout value was up 1.40 at 85.69.
Tuesday’s hog kill at 434,000 head is 8,000 more than last week and 10,000 greater than last year. This week’s hog slaughter should be at least as large as last week; such an aggressive pace of harvest should continue to keep live and carcass weights in check.