Market News

Lean hogs finish higher

Cattle country was quiet on Tuesday and significant trade is not expected much before the end of the week. Although asking prices are not well defined, some cattle have been priced around 172.00 to 173.00 in the South and 270.00 plus in the North. The kill totaled 114,000 head, 1,000 below last week, and 9,000 smaller than a year ago.

Boxed beef cutout values are higher on moderate demand and light offerings. Choice boxed beef is 2.36 higher at 251.56, and select is up 3.11 at 239.10.

Chicago Mercantile Exchange live cattle contracts settled 5 to 50 points lower. The lack of support in the feeder cattle futures kept the deferred contracts under pressure, but triple digit gains in boxed beef values seemed to curb much of the market pressure. Long liquidation and profit taking were the main features. October settled .35 lower at 169.20, and December was down .05 at 167.77.

Feeder cattle settled 5 to 115 points lower. The challenge seen in the feeder cattle futures of late, is the market direction has been so driven by momentum, it is hard to pinpoint a reason for a swift turn in market direction or activity levels. This was the case again on Tuesday as traders quickly tried to square positions given the lack of buyer support early in the week. Although contracts moved well off session lows, there remains some uncertainty about just how much gas is left in the tank to propel feeder cattle futures into the month of November. October settled .05 lower at 238.27, and November was down 1.15 at 233.65.

Feeder cattle receipts at the Tri State Livestock Auction at MC Cook, Nebraska totaled 2400 head on Monday. Compared to last week, steers were steady to 8.00 lower and heifers’ were 7.00 to 10.00 lower. A moderate demand was noted. 277 feeder steers medium and large 1 averaging 571 pounds brought 273.77 per hundredweight. 194 heifers weighing 567 averaged 251.29.

Lean hogs settled 25 to 125 higher. Despite the pressure in the cash market and pork cutout values in the morning report, buyer support remained in the nearby futures contracts. The focus moved from fundamental market direction, which has created so much pressure over the last couple of weeks, to the expectation traders will continue to see the lean hog market as oversold and be willing to step back into the complex at the end of the month. December settled 1.15 higher at 90.20, and February was up 1.07 at 89.30.

Barrows and gilts in the Iowa/Minnesota direct trade closed .70 lower at 87.75 weighted average on a carcass basis, the West was down .58 at 87.45, and the East was 1.90 lower at 86.34. Missouri direct base carcass meat price was 1.00 to 2.00 lower from 79.00 to 83.00. Midwest hogs on a live basis were steady with instances of 1.00 to 5.00 lower from 58.00 to 77.00.

The pork carcass cutout value was 2.39 lower FOB plant at 97.72.

The price of gas has dropped by 29 cents since last year and represents the lowest average cost of gas since Dec. 17, 2010, according to the Lundberg Survey just released. Gas prices have been steadily falling in recent months and are expected to continue to decline amid increasing oil production in the U.S. and abroad. This should make more room in the consumer’s budget for meat. 

The hog slaughter was estimated at 432,000 head, 3,000 more than last week, but the same as 2013.