Market News

Cattle futures set contract highs

Cattle country was quiet on Monday afternoon following the distribution of the new showlists. Ready numbers appear to be mixed, larger in Kansas and Nebraska, but a bit smaller in Texas and Colorado. A few of the showlists have been priced around 174.00 in the South, and 270.00 plus in the North. The kill was estimated at 114,000 head, 6,000 more than last week, but 5,000 less than last year.

Boxed beef cutout values were higher on moderate demand and light offerings. Choice beef was up 2.11 at 254.27, select was 1.74 higher at 240.03.

Live cattle contracts on the Chicago Mercantile Exchange settled unchanged to 82 higher with only August of 2015 lower. Futures broke away from early gains driven by follow through support seen last week. Nearby contracts remained higher, but pressure was evident through the second half of 2015 contract months. Although the focus appeared to be placed on short-term beef needs, the inability to narrow deferred price spreads could create some longer-term concern back into the market. However, most live contracts set new contract highs. December settled .80 higher at 171.00, and February was up .82 at 172.10.

Feeder cattle ended the session 2 to 136 points higher. The lack of follow through support in summer live cattle contracts eroded initial buyer support in front month November contracts. The focus in the complex has been placed on the need to draw additional interest back into the feeder cattle market as well as the recent gyrations in the corn market, which seems be creating an unsettled tone through the market. November closed .02 higher at 240.02, and January was up 1.35 at 237.47.

Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 5,000 head. Feeder steers and heifers were mostly firm to 5.00 higher early. The demand remains very good for light weight stocker cattle suitable for wheat pasture. Receipts were down this week due to unseasonably frigid temperatures, as well as snow and ice on the roadways causing some transportation concerns. Feeder steers calves medium and large 1 weighing 550 to 600 pounds trade from 289.00 to 304.50. Heifer calves weighing 550 to 575 pounds brought 261.00.

Lean hogs settled 65 lower to 50 higher. Futures moved back and forth through the session in a moderate trading range with prices seemingly unable to break out of widespread market shifts through early week trade. The focus through the complex remained on the direction of pork values and the ability to draw additional stability into cash values ahead of and through the holiday season. December settled .32 higher at 93.00, and February was down .12 at 92.62.

Barrows and gilts in the Iowa/Minnesota direct trade closed 1.01 higher with a weighted average on a carcass basis at 87.54, the West was up .81 at 87.34, and the East was down .27 at 83.79.Missouri direct base carcass meat price was steady to 1.00 higher from 77.00 to 81.00. Midwest hogs on a live basis trended steady from 56.00 to 64.00.

The pork carcass cutout value was down .34 at 95.59 FOB plant.

Pork processors are starting the week with attractive margins. Barring a sudden collapse in the carcass value, hog buyers have plenty of incentive to support the cash market, especially if the country offering keeps getting more manageable.

Monday’s hog kill at an estimated 427,000 head, is 4,000 more than last week, but down 10,000 from last year.