Cattle country remained quiet on Tuesday afternoon with bids and asking prices still not well defined, although a few showlists have been priced around 152.00 plus in the South, and 240 plus in the North. Significant trade volume will probably be delayed until the last half of the week. The kill totaled 115,000 head, 2,000 below last week, and 9,000 smaller than last year.
Boxed beef cutout values are higher on moderate demand and light to moderate offerings. Choice boxed beef was up .89 at 243.66, and select was .99 higher at 238.34.
Chicago Mercantile Exchange live cattle contracts settled 125 to 300 points higher on Tuesday. The aggressive support in feeder cattle contracts as well as expectations that further boxed beef support would be seen by the end of the day helped to draw additional trade into the complex. Most of the morning trade was done by commercial traders in the market, leaving the potential for additional investment activity through the near future. June settled the 3.00 limit higher at 151.15, and August was up 2.80 at 149.72.
Feeder cattle ended the session 240 to 290 points higher. All feeder futures held gains above 2.00 per hundredweight, and that sparked additional buyer interest through the close of trade. The expectation that cattle will remain scarce kept buyers extremely active. Some feeder futures climbed to all time record highs. August settle 2.72 higher at 210.62, and September was up 2.90 at 212.20.
Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 7,000 head. Compared to last week feeder steers were mostly steady to 2.00 higher with instances of $6.00 more on 6 to 7 weight steers. Heifers were steady to 2.00 higher with instances of 5.00 to 7.00 higher. Steer and heifer calves were mostly 4.00 to 5.00 lower, as the quality was not as attractive as last week. 675 to 700 pound yearling steers traded from 217.50 to 228.50. 650 to 700 pound heifers brought 201.00 to 213.00.
Lean hogs settled 62 to 212 points higher. Renewed buyer interest flooded into the lean hog futures. The emphasis of trade was placed on light supplies of hogs through the summer months, which helped to push July and August futures over $2.00 higher. Packers are trying to gain access to hogs, and that helped to firm the entire market. But the price spreads between nearby and deferred futures continues to widen. This significant discrepancy in prices through the remainder of the year is setting the stage for a market train wreck if the current market relationship continues according to Rick Kment at DTN. July settled 2.12 higher at 130.42, and August was up 2.10 at 131.07.
Barrows and gilts in the Iowa/Minnesota direct trade closed 2.40 higher at 126.56 weighted average carcass basis, the West was up 2.54 at 126.32, and the East was 118.72 with no price comparison. Missouri direct base carcass meat price closed 1.00 to 2.00 higher from 114.00 to 119.00. Midwest hogs were steady to 1.00 higher from 79.00 to 84.00 live basis.
Even though numbers continue to be tight for short term hog supplies, the incentive to sell hogs early in the year, rather than holding them for delivery in the fourth quarter of the year, could flood the cash market with any hogs nearing market ready weights. This has the potential to significantly turn the table on cash markets as well as draw average hog weights lower, according to DTN analysts.
The pork carcass cutout value was 1.77 higher at 131.53 FOB plant with the most significant gains in the loin primals.
The Tuesday hog kill was estimated at 399,000 head, 19,000 more than last week, but 3,000 less than last year.
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