Market News

Feeder cattle contracts finish with limit gains

Feedlot country remained quiet on Wednesday afternoon with both sides impressed by the mid-week explosion in cattle futures. Short bought packers no doubt wonder if growing board premiums will make this week’s procurement even more difficult, the assumption may be made that asking prices will continue to firm based on the new bullishness at the Mercantile Exchange. Some asking prices are reportedly around 165.00 plus in the South and 255.00 to 260.00 in the North. The kill was estimated at 114,000 head, even with last week, but 6,000 less than last year.

Boxed beef cutout values were steady to firm on moderate to fairly good demand and moderate to heavy offerings. Choice beef was up .11 at 238.14, and select was .73 higher at 227.18.

Live cattle contracts settled 45 to 245 points higher on the Chicago Mercantile Exchange with triple digit gains through all nearby contracts. Live cattle traders tried to keep up with the pace set by buyers in feeder cattle futures. The overall expectation that cattle numbers will remain tight seems to be overshadowing all concerns about moving beef. October settled 2.02 higher at 162.47, and December was up 2.42 at 165.90.

Feeder cattle finished with 300 point limit gains in all contracts except fall 2015. Feeder futures saw the gains as a combination of commercial and investment buyer interest flooded into the market. The lower cost of production from gain market weakness sparked increased interest in feeder cattle in all sectors. October settled at 238.42, and November 238.05.

Feeder cattle receipts at the Ozark’s Regional Stockyards at West Plains, Missouri totaled 2899 head. Compared to last week, feeder steers traded 3.00 to 9.00 higher with feeder heifers 3.00 to 6.00 higher. Yearlings were lightly tested with a firm to slightly higher undertone. Demand was very good on a moderate supply. Feeder steers medium and large 1 averaging 624 pounds traded at 253.73 per hundredweight. 680 pound heifers averaged 240.83.

Lean hog contracts were mostly higher with only front month October lower. The runaway gains in the feeder cattle futures seemed to help buyers regroup in the hog futures market following moderate early pressure. The gains came even as average hog weights at the end of last week increased. Even though this move is seasonal, the focus on higher numbers is expected to be keeping pork supplies readily available. October settled .37 lower at 107.60 and December was up .35 at 94.87.

There was moderate hog market activity and demand with the Iowa/Minnesota direct trade .13 lower at 108.71 weighted average on a carcass basis, the West was down .26 at 108.24, Barrows and gilts in the East were 1.11 higher at 102.76. Missouri direct base carcass meat price closed steady from 95.00 to 102. Midwest hogs on a live basis were steady with an instance of 2.00 higher from 95.00 to 102.00.

The pork carcass value FOB plant was .18 lower at 121.80. The belly primal was over 8.00 lower, but all other cuts were higher

Wednesday’s hog slaughter was estimated at 424,000 head, 3,000 greater than last week, but 10,000 less than last year.