Market News

Cash cattle trade was slow to develop

Most buyers and sellers in the cash cattle market continued to dig in their heels on Friday afternoon delaying the development of this week’s cash trade. On one hand packers are both short bought and poorly margined. Sellers are encouraged by tight fed numbers and the softer late week basis. Light to moderate business was still expected before traders call it a week, but that trade may stretch into the evening hours. The weekly cattle kill was estimated at 609,000 head, 72,000 more than the previous week, and 34,000 greater than 2016.

Boxed beef cutout values were higher on choice and steady on select on moderate to fairly good demand and moderate to heavy offerings. Choice beef was up 1.70 at 190.80, select .01 lower at 186.54.

Chicago mercantile exchange live cattle contracts settled .82 to 1.45 higher on Friday as traders tried to square positions ahead of the long holiday weekend. The firmness in beef values at the end of the week gave signs that support could be redeveloping across the comp0lex. Trade volume did remain extremely sluggish with most traders out of the complex.

Feeder cattle contracts settled .12 to 1.55 higher, with the March and April contracts up the most. The strong gains developed despite the overall market direction through much of the session. Traders moved into a position squaring attitude with short covering after the sharp losses developed over the last couple of trading sessions.

At Missouri Auctions last week feeder cattle receipts totaled 47,490 head. Compared to the previous week, feeders weighing less than 650 pounds sold steady to 5.00 higher, weights over 650 pounds sold steady to 3.00 lower. The supply of feeders was moderate to heavy. Several reporter noted that a lot of the offerings were carrying perhaps a little more flesh than most buyers would like, but given the overall mild winter so far that is too be expected, Demand was moderate to good, mid-weight replacement quality heifers and the mid-weight steers continue to find the most energetic buyers. 2,828 head of feeder steers medium and large 1 averaging 624 pounds traded at 141.47 per hundredweight. 1756 heifers averaging 623 pounds traded at 128.29.

Lean hogs settled .07 to .35 higher with only the February contract lower by .35. The hog complex was stuck in a narrowly mixed trading range for much of the session. The inability to draw firmer cash market support in the morning report was offset by the aggressive surge in pork values. With the market closed Monday many traders most likely focused on their late Friday moves to square positions ahead of the long weekend.

Barrows and gilts in the Iowa/Minnesota direct trade closed .34 lower at 62.12 weighted average on a carcass basis, the West was down .30 at 62.16, and nationally the market was .43 higher at 61.63. Missouri direct base carcass meat price was steady from 51.00 to 52.00.

The pork carcass cutout value was 1.17 higher at 80.64 FOB plant. Hams were 10.48 higher.

The weekly hog slaughter was estimated at 2.402,000 head, 314,000 more than last week, and 105,000 more than last year

Lean hog prices are quickly approaching breakeven levels and producers are current so packers may find it more and more difficult to source hogs without continuing to pay more money.