Market News

Cattle down ahead of cash business, USDA reports

Chicago Mercantile Exchange live cattle futures were lower ahead of widespread direct cash cattle business and Friday’s USDA numbers. The monthly on feed and bi-annual inventory numbers are scheduled to be released on the 21st at 3 PM Eastern/2 PM Central. August was $1.40 lower at $115.87 and October was down $1.80 at $117.07.

Feeder cattle were down sharply on the higher corn, in addition to position squaring ahead of direct cash trade and the USDA numbers. August was down $2.22 at $152.27 and September was $2.12 lower at $152.32.

Direct cash cattle markets were quiet after the light trade that developed late Wednesday in Nebraska. Sales were mostly at $188 on the dressed basis, down $2 from last week’s weighted average, with a few as high as $189 to $190. Packers are probably short, but profit margins have narrowed recently and widespread business may wait until after Friday’s USDA numbers. Asking prices are expected to be renewed around $121 to $122 live and $190 to $192 dressed with bids reported at $117 to $118 live and $187 and $190 dressed.

Boxed beef closed narrowly mixed on moderate demand for heavy offerings. Choice was down $.08 at $207.65 and Select was up $.09 at $195.58. The estimated cattle slaughter of 118,000 head was steady with a week ago and up 5,000 from a year ago.

At the Mitchell Livestock Auction feeder sale in South Dakota, compared to two weeks ago, feeder steers weighing less than 900 pounds were steady to $8 higher, in a narrow comparison, and steers weighing more than 900 pounds were steady to $3 higher. Feeder heifers were $3 to $5 higher. The USDA says there was good demand for the large offering of high quality yearlings. Flesh conditions were mixed, depending on whether the yearlings were coming off of grass or out of feedyards. 98% of the offering weighed more than 600 pounds and 58% feeders were steers. Medium and Large 1 feeder steers weighing 920 to 1,000 pounds sold at $136.75 to $144.50 and Large 1 feeder steers weighing 1,000 to 1,100 pounds brought $130 to $138. Medium and Large 1 feeder heifers weighing 700 to 770 pounds were reported at $143 to $153.25 and 900 to 960 heifers ranged from $132.25 to $140.

Lean hog futures were mixed on spillover from cattle, spread trade, and demand uncertainties. Traders were also getting ready for the monthly livestock slaughter numbers and Monday’s cold storage report. August was down $1.47 at $81.10 and October was $.95 lower at $67.85.

Cash hogs were steady to lower. Buyers are moving the needed numbers, with the weekly kill expected to be up about 4% on the year. As prices have dipped, negotiated receipts have moved higher, reflecting the recent packer leverage. The trade is keeping an eye out for the seasonal expansion of market ready numbers, which is expected to get underway in earnest within the next couple of weeks, along with a top in the wholesale market.

Iowa/Southern Minnesota direct barrows and gilts closed $.42 lower at $83 to $85.50 for a weighted average of $84.84, the Western Cornbelt was down $.36 at $83 to $85.50 with an average of $84.84, and the Eastern Cornbelt was $.55 lower at $79 to $85 for an average of $83.88. National direct business was down $.51 at $79 to $85.50 with an average of $84.28. Butcher hogs at the Midwest cash markets were steady at $56 to $62. Missouri direct butcher trade was steady at $80 to $81 on light to moderate supply and demand. Sows were steady at $48 to $64. Illinois direct sows were firm at $60 to $68 with very good demand for moderate to heavy offerings. Barrows and gilts were $1 lower at $57 to $64 on good demand for moderate offerings. Boars ranged from $10 to $41.

Pork closed $.67 lower at $104.02. Loins were firm and bellies were sharply higher, but the other primals were lower. The estimated hog slaughter of 439,000 head was down 1,000 on the week, but up 9,000 on the year.