Market News

Pork carcass values take a hit

The cash cattle market was quiet on Friday with trade completed earlier in the week. Cattle prices on Wednesday were steady to firm with the previous week with live sales in the South at 164.00 Northern business saw the dressed basis 256.00 to 258.00. Total cash trade was around 98,000 head in the major feeding states.. The weekly cattle slaughter was estimated at 565,000 head 3,000 more than the previous week, but 55,000 head less than a year ago.

Boxed beef cutout values were steady on light to moderate demand and offerings. Choice beef 249.16 up .24, and select down .14 at 234.78.

Chicago Mercantile Exchange Live cattle contracts settled 7 to 140 points lower on Friday. There was light to moderate pressure that expanded through the morning trade as aggressive triple digit losses redeveloped in the feeder cattle pit. Traders moved their focus from firm cash cattle trade earlier in the week, and back to the losses in the feeder futures. We could see follow through pressure to start the week. October was .20 lower at 165.05 and December was down .25 at 165.05.

Feeder cattle contracts settled the 300 point limit lower in all but the front month October futures. The limit losses offset gains which flooded the market on Thursday, allowing for additional concerns about long term buyer interest rather than fundamental support of cash market strength. The aggressive pressure in the market may lead to additional liquidation next week. October settled 1.75 lower at 238.45, and November was down the 3.00 limit at 234.15.

Feeder cattle receipts at Missouri auctions this week totaled 23,130 head. Compared to last week, feeders under 500 pounds sold steady to 5.00 lower, feeders over 500 pounds were unevenly steady to 5.00 higher. The supply of feeders was moderate and demand was good. Rains made getting cattle off the farms a bit more difficult. October has now moved to the second wettest in history in several parts of the state. 755 head of feeder steers, medium and large 1 averaging 574 pound traded at 272.72 per hundredweight. 387 heifers weighing 574 averaged 248.32.

Lean hogs settled 25 to 135 points higher as eroding pork values were offset by short covering following losses earlier in the week. Deferred contracts held moderate to strong gains based on traders expecting the sharp pressure may be a bit aggressive, leaving the complex in an oversold situation into the weekend. Traders continue to concentrate on the aggressive slide in cash and meat values as well as growing supply concerns. December was up .25 at 90.57, and February was 1.10 higher at 87.55.

Barrows and gilts in the Iowa/Minnesota direct trade closed 1.84 lower at 98.27 weighted average on a carcass basis, the West was 1.52 lower at 98.18 and the East was 1.06 lower at 100.80. Missouri direct base carcass meat price was steady to 3.00 lower from 85.00 to 96.00. Midwest hogs on a live basis were steady to 2.00 lower from 71.00 to 78.00 in a light test.

The pork carcass cutout value was down 2.71 at 111.01 FOB plant. All cuts except picnics were lower.

Growing emphasis on the progression of corn and soybean harvest through much of the Corn Belt is helping moderate both short-term and long-term feed prices. It is possible to lock in corn and soybean meal prices at current levels, which will help to keep cost of production low through most of 2015. 

The weekly hog kill was estimated at 2,187,000 head, 51,000 more than the previous week, but 103,000 less than last year.