Market News

A light cattle trade at higher prices on Friday

USDA Mandatory reported cattle trading was light in Kansas on moderate demand, compared to the previous week, live sales were 2.00 to 3.00 higher at 155.00. Trading was light in Nebraska on moderate to good demand. Compared to a week ago, a few live sales traded steady to firm at 155.00, and dressed sales 3.00 higher at 245.00. Trading was light in Iowa on moderate demand, dressed sales were 1.00 higher at 243.00. The weekly cattle slaughter was estimated at 584,000 head, 6,000 less than last week, and 49,000 head smaller than 2013.

Boxed beef cutout values were weak on light to moderate demand and moderate to heavy offerings. Choice boxed beef was .59 lower at 246.30 and select was .88 lower at 234.39.

Chicago Mercantile Exchange live cattle contracts settled 50 to 132 points higher. The fact that strong late week support quickly flooded back into the lean hog futures market changed the overall tone of the cattle market. Follow through buyer support quickly redeveloped, seemingly out of thin air, with moderate to strong gains holding. Word of cattle trading in the North at higher prices was also supportive late in the session. August went off the board at 155.90 up 1.25 and October was 1.32 higher at 151.42.

Feeder cattle ended the session 150 to 245 higher. Feeders shook off the early pressure as traders looked for additional support coming from both the lean hog and live cattle futures market. Trade mentality seemed to be focused on closing the week higher given the light trade volume and lack of additional fundamental pressure seen in the market. September settled 1.50 higher at 218.65, and October was up 1.95 at 216.72.

Feeder cattle receipts at Missouri auctions this week totaled 14,923 head. Compared to the previous week, feeder steers and heifers trended steady to 5.00 lower, although some southern markets did see instances of fully steady to firm markets on light weight feeders suitable for grazing wheat pastures. The supply of feeders offered at auctions was light as the August heat kept many producers at home. Feeder steers medium and large 1 averaging 624 pounds traded at 245.27 per hundredweight. 619 pound heifers averaged 227.43.

Lean hogs settled 25 to 265 points higher. End of the week buying flooded back into the market with front month October futures trading at or near the $3 trading limit at times.  The focus was on the potential fundamental support seen through early September which could lead to another round of active commercial and investment support stepping into the complex. October settled 2.65 higher at 98.12, and December was up 1.62 at 92.00.

Barrows and gilts in the Iowa/Minnesota direct trade closed 2.07 higher with a weighted average of 92.60 on the carcass basis, the West was up 1.07 at 91.53, and Eastern markets at 90.50 with no price comparison. Missouri direct base carcass meat price was steady at 88.00.

The pork carcass value was 1.10 higher at 101.72 FOB plant, bellies were nearly 11.00 higher.

Barring a huge surprise in country numbers, weekly hog kills will steadily climb from September through November. By Thanksgiving, pork demand will be challenged to handle an additional 300,000-plus heavy hogs on a weekly basis.

The weekly hog kill at 1,979,000 head is 12,000 less than last week and 229,000 less than last year.

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