Market News

Lean hogs staged a turnaround and settled higher

Cattle country was generally quiet on Thursday afternoon. Some packers still act like they need to buy more cattle. A few cattle sold in Kansas, Nebraska and Iowa at 153.00 on the live basis. Nebraska also saw some dressed trade from 241.00 to 243.00. Trade volume totals remain fairly light. It is possible some will delay pulling the trigger until after release of the on feed report Friday. Asking prices are around 244.00 plus in the North and 154.00 to 155.00 in the South. The kill totaled 112,000 head, 1,000 more than last week, but 12,000 less than last year.

Live cattle contracts on the Chicago Mercantile Exchange settled 40 points higher to 132 lower with all 2014 contracts in the black. Cattle futures moved off of session lows with the strong shift higher in the lean hog futures creating some spillover buyer support in the nearby cattle contracts. August settled .40 higher at 149.65, and October up .15 at 145.55.

Feeder cattle ended the session mostly lower with only front month August higher. Futures bounced well off session lows at midday. Very little attention was placed on the front month contract with September through November contracts gaining the most attention. August settled .25 higher at 215.20 and September was down 1.82 at 209.42.

Feeder cattle receipts at the Springfield Livestock Marketing Center in Missouri totaled 1291 head. Compared to last week, steers were steady, Holsteins were scarce, and heifers trended 4.00 to 10.00 lower. The demand was moderate to good on a moderate supply. Tumbling cattle futures and hot weather put pressure on the feeder cattle trade. Feeder steers medium and large 1 averaging 721 pounds brought 219.84 per hundredweight. 532 pound heifers averaged 229.54.

Lean hogs settled 95 to 182 points higher. Despite moderate pressure through most of the morning, a midday turnaround quickly swept through the lean futures market pushing nearby contracts over a 1.00 higher. Firming pork values in the morning report may not have changed the support of the market, but traders focused on the fact lean hog markets have been well oversold given the little additional information that is available concerning both supplies and demand for hogs. October settled at 93.60 and December at 87.55 with both up 1.12.

There was slow hog market activity with light demand on Thursday. Barrows and gilts in the Iowa/Minnesota direct trade closed .79 lower at 95.89 weighted average on a carcass basis, the West was down .55 at 95.81, and the East was 1.24 lower at 96.77. Missouri direct base carcass meat price closed steady to 1.00 higher from 95.00 to 98.00. Butcher hogs at Midwest markets were steady with an instance of 1.00 lower from 64.00 to 80.00.

The pork carcass cutout value was down 1.07 at 106.18 FOB plant. Bellies picnics and ribs were all lower.

Iowa barrows and gilts averaged 282.5 pounds last week, 1.3 pounds lighter than the prior week, though still 10.5 pounds heavier than 2013. This seems like good evidence that pork producers are pulling market hogs forward, away from severe fall discounts.

Thursday’s hog kill was estimated at 406,000 head, the same as last week, but 19,000 less than last year.