Market News

Lean hog contracts close lower

There was aggressive spending in parts of the northern cattle country on Thursday, with cattle on a live basis selling at 162.00, and 257.00 to 262.00 dressed. Trade volumes suggest we could see more trade on Friday especially in the South. On the other hand, it’s a good guess that packers are probably troubled by the runaway cost of cattle in late July, wondering if they can manage to sell beef high enough to maintain profit margins. Nevertheless, bullish feedlot managers will be pricing the balance of the showlists near the top of Thursday’s business. The kill totaled 115,000 head, even with last week, but 8,000 below a year ago.

Boxed beef cutout values were sharply higher on good demand and light to moderate offerings. Choice boxed beef was up 2.97 at 255.56, and select was 4.13 higher at 252.84.

Chicago Mercantile Exchange live cattle contracts settled 05 to 75 points higher. Market direction was hard to establish with prices moving higher and lower and buyers and sellers quickly jumping in and then back out of the market. Strong support in both cash markets and beef values pointed to follow through support, while the lean hog market lent some weakness to the complex. August settled .50 higher at 156.55, and September was up .05 at 158.05.

Feeder cattle settled 67 points higher to 55 lower. Although feeder futures bounced all over the place, prices were mixed in a narrow range as very little additional direction developed across the complex. There were times moderate to strong buyer support pushed prices higher, but the lack of overall volume in the market was unable to sustain the gains. August settle .07 higher at 217.32, and September was down .35 at 218.05.

Feeder cattle receipts at the Bassett Livestock Auction, Bassett, Nebraska totaled 1540 head on Wednesday. A limited number of comparable offerings from two weeks ago with 650 pound steers significantly higher and 850 pound heifers 10.00 higher. Demand was very good for all offerings of weaned fall calves and reputation, replacement quality heifers. 185 head of 677 pound steers averaged 268.19 per hundredweight. 120 replacement heifers averaging 930 pounds brought 219.00 on average.

Lean hogs settled 90 to 287 points lower. The main accomplishment in the lean pit was that prices moved off daily trading limit losses. The lack of fundamental support seen in the hog market is still a major obstacle for traders to look past. August settled 1.37 lower at 123.20, and October was down 2.55 at 107.90.

Barrows and gilts in the Iowa/Minnesota direct trade closed 1.18 higher at 126.38 weighted average on a carcass basis, the West was up .87 at 126.05, and the East was 1.27 lower at 123.52. Missouri direct base carcass meat price was steady to 3.00 lower from 116.00 to 122.00. Barrows and gilts at Midwest markets were steady from 88.00 to 96.00 live.

The pork carcass cutout value closed 1.29 lower at 131.31 FOB plant.

For the week ending July 19, Iowa barrows and gilts averaged 284.8 pounds, .8 pound lighter than the prior week, though still 13.7 pounds above 2013. It seems like a good bet that hog size will shrink again this week given hot summer temps.

Thursday’s hog slaughter was estimated at 393,000 head, 2,000 less than last week, and down 7,000 from last year.

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