Market News

Cattle down sharply ahead of direct cash trade

Chicago Mercantile Exchange live cattle futures were sharply lower on another round of liquidation, as the trade gets ready for widespread direct cash business. Boxed beef at midday was mixed, the Fed Cattle Exchange trade was uninspiring, and futures are tentative about this week’s direct trade after last week’s losses. August was down $2.20 at $113.55 and October was $1.92 lower at $112.82.

Feeder cattle futures were sharply lower on the firm corn, in addition to continued liquidation and the cash and wholesale concerns. August was $3.87 lower at $142.22 and September was down $3.70 at $142.72.

Direct cash cattle markets are quiet as buyers and sellers get back to business after Independence Day. This week’s showlist looks generally larger, except for Nebraska, and a lot of buyers are short after last week’s relatively light trade. Widespread business is not expected until Thursday or Friday. Asking prices were reported at $122 to $123 on the live basis in the South. Packer inquiry was pretty much non-existent.

Boxed beef closed lower on light to moderate demand and moderate offerings. Choice was down $.31 at $222.58 and Select was $2.13 lower at $205.32. The estimated cattle slaughter was 119,000 head, up 1,000 on the week and 11,000 on the year.

USDA reported feeder cattle auctions were hard to come by Wednesday, with a number of major operations taking an extended July 4th holiday. The Fed Cattle Exchange says that out of an offering of 2,093 head, 429 head sold, 455 were unsold, and the remaining 1,209 head were called PO, meaning the seller “passed on” the bids. Sales of 92 head all in Kansas for 1 to 9 day delivery had a weighted average of $117.75 and sales of 337 head all in Nebraska for 17 to 30 day delivery averaged $117.25.

Lean hog futures were higher on short covering, the firm midday pork, and most contracts’ discount to the cash index. July was $1.35 higher at $92.05 and August was up $.17 at $84.57.

Cash hogs were nearly unchanged. Buyers are watching the availability of market ready numbers and wholesale business. The wholesale trade may be close to its seasonal top, with plenty of pork available and market ready numbers expected to increase in the coming weeks. Saturday’s kill is expected to be about 200,000 head, but that could rise of buyers run into procurement issues. The average Iowa/Southern Minnesota hog weight for the week ending July 1st was 276.4 pounds, down a half a pound on the week and three tenths of a pound on the year.

Iowa/Southern Minnesota barrows and gilts closed $.10 higher at $82 to $89 for a weighted average of $87.70, the Western Cornbelt was up $.08 at $82 to $89 with an average of $87.64, and national direct business was $.49 higher at $82 to $89 for an average of $86.96. Butcher hogs at the Midwest cash markets were steady to $2 higher at $57 to $60. Missouri direct butcher trade was steady at $79 to $81 on light to moderate supply and demand. Sows were steady to $2 higher at $40 to $57. Illinois direct sows were firm at $49 to $61 on good demand for heavy offerings. Barrows and gilts were steady at $57 to $62 with good demand for moderate offerings. Illinois boars ranged from $10 to $40.

The pork cutout closed $.09 higher at $104.41. Butts, picnics, hams, and bellies were higher, but loins were down and ribs were sharply lower. The estimated hog slaughter was 430,000 head, 7,000 less than a week ago and unchanged from a year ago.