Market News

Lean hogs trade sharply higher

Chicago Mercantile Exchange lean hog contracts saw sharp triple digit gains with the summer contracts focusing on short covering activity. There is expected to be some additional longer term support developing after the first of July, but this could spark additional volatility given the light trade seen over the last couple of trading sessions. July hogs were up 1.80 at 76.05, and August was 2.47 higher at 74.25.

There were sharp losses again on Tuesday in the live cattle complex. The bearishness seen through feeder cattle futures has been impossible for live cattle traders to overlook. Traders were dealing with uncertain fundamental support surrounding the holidays, but also the wild shifts in the outside markets, and end of the month, and end of the quarter positioning taking place. June was 1.82 lower at 147.85, August was down 1.80 at 148.97, and October 1.60 lower at 150.70.

Feeder cattle experienced limit down trade. The market was already bearish in early morning trade, and the bullishness of the USDA crop reports only added weakness to the entire complex. A close at the 4.50 per hundredweight imposed trading limit would allow for expanded limits Wednesday, which could add even more uncertainty to the volatile market. August was down 4.42 at 214.65, September was 4.50 lower at 213.40 and October was also limit down at 212.97.

Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 6500 head. Compared to last week, feeder steers traded mostly steady to 3.00 lower. Heifers were unevenly steady on limited comparable sales from the previous week. Steer and heifer calves were too lightly tested for a market trend, but a mostly steady undertone was noted. Feeder steers medium and large 1 averaging 712 pounds traded at an average of 236.84 per hundredweight. 721 pound heifers averaged 211.38.

It was quiet in feedlot country on Tuesday afternoon with even preliminary bids difficult to find. Asking prices are around 150.00 in the South and 240.00 in the North. Significant trade volume may be delayed until sometime on Thursday. Buyers and sellers should conclude business before the long weekend. The Chicago Mercantile Exchange is closed on Friday and it is a Federal holiday so markets will not be reported. The kill was estimated at 114,000 head, 1,000 more than last week, but 2,000 below a year ago.

Boxed beef cutout values were weak on choice and firm on select on light to moderate demand and offerings. Choice beef was .48 lower at 252.73, and select was up .71 at 249.35.

The pork carcass cutout value was 1.47 lower at 81.44 FOB plant.

Barrows and gilts in the Iowa/Minnesota direct trade closed.13 higher at 74.75 weighted average on a carcass basis, the West was up .03 at 74.81, and nationally the market was .30 higher at 73.85. There was moderate market activity with light to moderate demand. Missouri direct base carcass meat price was steady from 69.00 to 70.00.

Given the short kill schedule ahead, 150,000 expected on Friday, zero on Saturday, hog buyers could have an easy appetite to satisfy over the next several days.

The Tuesday hog kill was estimated by USDA at 425,000 head, 3,000 more than last week, and 13,000 greater than last year.