Market News

Cattle were priced sharply higher than last week

Packer inquiry into the cattle was light to moderate, but not much business was transacted. Several packers and at least one major bid as high as 255.00 dressed in parts of Nebraska. Significantly higher than last week’s weighted average of 246.75. Asking prices are around 160.00 plus in the South and 255.00 plus in the North. The kill totaled 114,000 head, 1,000 below last week, and 7,000 smaller than last year.

Boxed beef prices not available due to computer issues at Market News.

Chicago Mercantile Exchange live cattle contracts settled mostly lower. The August contract established new contract highs early in the trading session on Wednesday. Following the initial push higher, prices tumbled lower. Little changed in the market fundamentally or technically, but the recent highs have allowed traders to square positions as uncertainty about further aggressive price support becomes more apparent. Only the two front months closed higher with August up .10 at 156.05 and October up .12 at 158.00.

Feeder cattle ended the session 17 to 162 points higher. The initial strong follow through gains during overnight trade quickly evaporated as additional volume surfaced. This led to positioning activities through the morning. Trade volume slowed through the complex. August settled 1.22 higher at 217.25, and September was up 1.62 at 218.40.

Feeder cattle receipts at the Ozarks Regional Stockyards at West Plains, Missouri totaled 2914 head on Tuesday. Compared to last week, the bulk of the feeder cattle trended 2.00 to 8.00 lower. Yearling steers traded firm with yearling heifers not well tested, although the undertone was lower. Demand was good on a moderate supply. Feeder steers medium and large 1 averaging 625 pounds brought 233.20 per hundredweight. Feeder heifers weighing 612 pounds brought 221.01.

Lean hogs settled 105 to 300 points lower. Aggressive price support seen on Tuesday was short lived as continued weakness in cash markets created major concern about sustaining price levels through the hog complex. The price spread is wide, nearby contracts were priced from 96.00 to 124.00. Continued weakness could create some significant liquidation through the complex, potentially putting more emphasis on deferred futures priced below 100.00 per hundredweight. August settled at 124.57, and October was at 110.45 with both the 3.00 limit lower.

Barrows and gilts in the Iowa/Minnesota direct trade closed .80 lower at 125.23 weighted average on a carcass basis, the West is down .77 at 125.21, and the East is 1.18 lower at 124.76. Missouri direct base carcass meat price closed steady from 119.00 to 122.00. Midwest hogs were 2.00 higher to 2.00 lower from 88.00 to 96.00 live basis.

The pork carcass cutout value was 1.24 lower at 132.60 FOB plant. Bellies were over 6.00 lower.

Given the recent surge in wholesale beef prices, pork items are probably becoming increasingly competitive. Furthermore, the discount of lean hog futures represents greater pork featuring plans that can take comfort in both the likelihood of cheaper costs and larger wholesale offerings.

The hog slaughter was estimated at 395,000 head, the same as last week, but down 6,000 from last year.