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Boxed beef and pork close significantly lower

Packer inquiry into the cattle remained light on Wednesday afternoon with just a few scattered bids at 151.00 to 152.00 live and 240.00 dressed. Significant business could be delayed until Thursday or Friday, but both sides would probably like to get things done by Thursday in order to clear the deck for the Labor Day weekend. Asking prices are around 155.00 to 156.00 in the South and 245.00 to 248.00 in the North. The slaughter totaled 114,000 head, 2,000 below last week and 9,000 less than 2013.

Boxed beef cutout values were lower on light to moderate demand and moderate offerings. Choice beef was down 1.07 at 247.41, and select was .88 lower at 237.60.

Chicago Mercantile Exchange live cattle contracts settled 35 to 125 points lower. Selling pressure seemed to be tied to long liquidation, demand nervousness, and thin volume. Many traders seemed to take a wait and see approach when it comes to weekend product demand and product clearance. If overall movement is better than expected, there is the expectation additional volume will be seen in early September to replenish working meat stocks. August settled .35 lower at 153.20 and October was down .42 at 147.82.

Feeder cattle ended the session 62 points higher to 100 lower with the front month contracts holding narrow gains due to a lack of interest and light trade in the complex. Uncertainty about upcoming weekend product movement created widespread concerns through the complex. August settled .62 higher at 218.15, and September was up .27 at 214.47.

Feeder cattle receipts at the Philip, South Dakota Livestock Auction totaled 1778 head on Tuesday. The sale has not been reported recently so no price comparisons were made. There was very good demand for several long strings of feeder steers and many packages of tested open heifers that sold on an active to very active market. Feeder steers averaging 933 pounds traded at 214.17 per hundred weight. 869 pound heifers brought 205.36.

Lean hogs settled 20 to 112 points higher. The initial gains eroded, allowing for the triple digit gains in some contracts to evaporate as the session wound down. The focus in the complex appeared to be on the ability to stabilize fundamentals through the end of August and help to draw additional buyer support back into the nearby contracts. October settled .82 higher at 95.92 and December was up .80 at 90.50.

Barrows and gilts in the Iowa/Minnesota direct trade ended the day 1.26 lower at 92.31 weighted average on a carcass basis, the West was down .82 at 92.30, and the East was not reported due to confidentiality. Missouri direct base carcass meat price was steady at 88.00. At the Midwest markets hogs were steady to 1.00 lower from 62.00 to 70.00 live basis.

The pork carcass cutout value was .88 lower at 237.60 FOB plant with the bellies nearly 14.00 lower.

Despite the recent plunge in country sales, DTN reports pork producers continue to enjoy great profit margins. Furthermore, pricing in the lean hog futures market is still at historically strong levels and at today’s corn and meal prices, a solid positive margin on forward lean hog sales can be achieved. Some level of herd expansion could be definitely in the mix.

Wednesday’s hog slaughter was estimated at 411,000 head, 10,000 more than last week, but down 22,000 from last year.

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