Cattle country was at a standstill on Tuesday afternoon with bids virtually absent. Feedlots watched the futures close higher and adjusted their asking prices accordingly. Although asking prices are not well defined, it sounds like some feedlot managers are pricing around154.00 in the South and 245.00 to 246.00 plus in the North. Significant trade volume could be delayed until Thursday or Friday. The kill totaled 115,000 head, 2,000 less than last week, and 6,000 smaller than 2013.
Boxed beef cutout values are higher on moderate demand and light offerings. Choice beef was up 1.27 at 231.76 and select was 1.93 higher at 229.74.
Live cattle contracts on the Chicago Mercantile Exchange settled 25 to 210 points higher as strong buyer support quickly jumped into the futures trade on Tuesday. The initial expectation that corn markets would back away from Monday’s gains was short lived as grain market support redeveloped. But that was not enough to shake the interest of buyers. Triple digit gains remained solid in the nearby contracts as traders focus on the potential additional fundamental support through the end of the week. April settled 1.50 higher at 145.62, and June was up 2.10 at 137.00.
Feeder cattle ended the session 110 to 142 points in the black on support from the gains in the live pit and the lean hog complex. There was very little fundamental direction associated with the market rally which could lead to some additional price shifts later in the week. But aggressive outside market direction made many traders quickly step into the market so they aren’t left out, according to Rick Kment at DTN. March feeders settled 1.12 higher at 172.90, and April was up 1.27 at 174.35.
Lean hogs settled 150 to 300 points higher. The window to trade in the lean hog market was cut short, not due to markets closing or lack of activity, but because all nearby contracts were locked in limit higher trade. This put additional focus on the future direction of the market with watchers staring in amazement at the soaring price levels and seemingly unquenchable thirst of buyers. Ideas that supply tightness will continue to be the focus through most of the spring created the current buying activity. April settled the 3.00 point limit higher at 111.67 and May was also up 3.00 at 114.55.
Barrows and gilts in the Iowa/Minnesota direct trade were 1.41 higher with a weighted average of 103.28 on a carcass basis, the West was up 1.28 at 102.83, and Eastern hogs were 1.72 higher at 99.59. Missouri direct base carcass meat price closed steady from 91.00 to 96.00. Terminal hogs trended steady to 2.00 higher from 64.00 to 70.00 live.
The pork carcass value FOB plant closed 1.27 higher at 107.54 with all cuts showing gains.
DTN reports, If Russian intervention in the Ukraine forces a response from the U.S. a significant trade war could develop, hurting U.S. exports of beef and pork to Russia.
Hog slaughter was estimated at 409,000 head, 7,000 less than last week and down 17,000 from last year.