Market News

Livestock futures suffer sharp losses

Cattle country was relatively quiet on Tuesday afternoon, although private sources reported a few scattered bids in Kansas from 158.00 to 159.00. With the sharp losses in futures it’s hard to know where cattle will be priced. There has been some talk in the market of feedlots pricing ready steers and heifers $10.00 to 12.00 over the board. It would seem we are looking at another round of extremely strong basis levels. Exactly how strong probably won’t be determined until the end of the week. The kill totaled 112,000 head, 1,000 more than last week, but 6,000 smaller than a year ago.

Boxed beef cutout values were lower on light demand and light to moderate offerings. Choice beef down 1.18 at 258.24 and select was 1.02 lower at 248.83.

Live cattle contracts settled 132-272 lower on the Chicago Mercantile Exchange on Tuesday. The session started with light early gains with traders looking for direction but the market turned bearish as nearby futures turned limit down. By midday the prices were off the day’s lows. The lack of support in the feeder cattle markets following the long weekend seemed to limit expectations of follow through support in the near future. February settled 1.40 lower at 153.05, and April was down 1.87 at 151.07.

Feeder cattle ended 37 points higher to 252 lower. Like the live pit the early gains were short lived. Strong losses were seen in all but the front month January futures. The $12.00 premium in the January over the March contracts created some uncertainty as January contracts move toward irrelevancy. DTN reports the weaker tone across the rest of the cattle complex could lead to additional pressure, and possibly a move below $200.00 per hundredweight before the end of the week. January settled .37 higher at 214.47 and March was down 2.37 at 202.47.

Feeder cattle receipts at the Joplin Regional Stockyards on Monday totaled 11,762 head. Compared to last week, steers weighing less than 700 pounds were steady to 5.00 lower, over 800 pounds 10.00 to 15.00 lower, heifers weighing over 700 pounds 5.00 to 10.00 lower. The demand was moderate to good on a heavy supply. Feeder steers medium and large 1 averaging 725 pounds averaged 220.96 per hundredweight. 599 pound replacement heifers averaged 261.00.

Lean hog contracts settled 212 to 300 points lower. If the general weakness through the lean hog complex and pork values was not enough to add pressure to futures prices on Tuesday, the aggressive losses in the cattle complex added additional softness to the market. February settled 2.72 lower at 71.77, and April was down the 3.00 limit at 74.67.

Barrows and gilts in the Iowa/Minnesota direct trade closed 2.03 lower at 68.73 weighted average on a carcass basis, the West was down 1.90 at 68.76, and the East was .45 lower at 69.58. Missouri direct base carcass meat price was steady to 2.00 higher from 62.00 to 67.00. Midwest hogs were steady to 1.00 lower from 44.00 to 50.00.

Pork trading FOB plant closed 1.38 higher at 85.91 with only picnics lower.

Hog slaughter last week totaled 2.276 million head, up 6.4% from the week before but only up 0.6% from the same week last year. So far ready numbers seem to be building slower than the Dec 1 inventory implied.

Hog slaughter was estimated at 434,000 head, 1,000 more than last week and 3,000 greater than last year.