Market News

Cattle futures rally on China beef news

Cash cattle business is finished for the week. Trade that developed across the North on Thursday afternoon appeared to be enough to take care of needed cleanup activity. The uncertainty of how the futures market rally Friday will affect cash markets early next week will create more questions than answers for packers and feed yard managers to contemplate over the weekend. The weekly cattle kill was estimated at 609,000 head, 3,000 smaller than last week, but 11,000 greater than last year.

Boxed beef cutout values closed higher on choice and lower on select on light to moderate demand and light offerings. Choice beef 247.69, up .83, select 225.51, down 1.15.

Live cattle contracts on the Chicago Mercantile Exchange settled 1.25 to 2.60 higher. Strong buyer support developed in the complex as traders stepped into the market at the end of the week. News that China has agreed to accept U.S. beef by mid-summer was a shot in the arm to the market that has been bearish all week. Deferred contracts were supported by triple digit gains. That makes sense with traders viewing the development as longer term bullishness.

Feeder cattle contracts settled 2.17 to 4.50 higher. End of the week short covering flooded in to the market as little additional resistance developed across the complex. This quickly allowed market to move sharply higher in the nearby contracts, and August through November saw gains of 4.50. The China beef trade news leant additional support to the market.

Feeder cattle receipts at Missouri auctions this week totaled 42,679 head. Compared to last week, feeder steers and heifers ended the week steady to 5.00 lower. A few early week markets and some that did not have sales last week were much stronger as they tried to catch up with the gains the market saw last week, still quoting certain classes 10.00 to 15.00 higher. By mid-week the tone turned and cash markets tumbled with 10.00 lower being frequent in reporter’s narratives. The supply was heavy with the largest volume since early January, this was most likely due to the fact so many markets were affected by the weather last week. Feeder steers medium and large 1 averaging 623 pounds traded at 168.13 per hundredweight. 622 pound heifers averaged 147.27.

Lean hogs settled mostly .02 to 1.52 higher with just a couple of deferred contracts lower. Light end of the week buying developed across the complex. This allowed prices to move moderately higher in the summer and fall contracts following the strong support moving back into the cattle complex as well as buyers covering positions following a move lower on Thursday.

Barrows and gilts in the Iowa/Minnesota direct trade closed .41 lower at 70.28 weighted average on a carcass basis, the West was .38 lower at 70.26, and nationally the market was up .17 at 69.73. Missouri direct base carcass meat price was 6.00 to 7.00 higher from 59.00 to 62.00.

The pork carcass cutout value was up 1.44 at 83.29 FOB plant.

Feeder pig receipts nationally this week totaled 89,281 head. Compared to last week, early weaned pigs were steady. All feeder pigs were 1.00 per head higher. Demand was moderate for moderate offerings. Early weaned pigs’ 10 to 12 pound basis 22.00 to 36.50 per head. 40 pound pigs 51.00 to 61.00 per head. Prices quoted are on a per head basis delivered to the buyers’ farm, and include freight and fees on a farm to farm basis.

The weekly hog slaughter was estimated at 2,258,000 head, 4,000 less than last week, but 46,000 more than last year.