Market News

Feeder cattle futures were sharply lower

The feedlot cattle trade was wrapped up early this week. Prices were sharply higher, up $5.00 to 6.00 and trade volume was decent in most areas. Look for feedlot operators to price cattle at least several dollars higher on Monday. The weekly cattle kill is estimated at 575,000 head, 3,000 above last week, and 34,000 greater than last year.

Boxed beef cutout values were sharply higher on moderate to fairly good demand and moderate offerings. Choice beef 198.86, up 2.77, and select 195.48, up 2.65.

The February 1, cattle on feed report appears to be well anticipated, on feed up one-percent, placements in January eleven- percent higher, and marketing’s in January up ten-percent. The reports bearish implications may already be reflected in the current price structure

Live cattle contracts on the Chicago Mercantile Exchange settled .67 to 2.17 lower with aggressive triple digit losses in all contracts except February. The combination of sharp pressure quickly developed across the feeder cattle trade as well as the inability for significant support to develop in deferred live cattle contracts through the week quickly pushed prices lower. There was also some pre-report positioning ahead of the cattle on feed report due out after the close of trade.

Feeder cattle ended the Friday session 1.70 to 3.95 lower. The tone of the market quickly weakened given the strong buyer interest seen in live cattle markets through much of the week. Increased concern surrounding the cattle on feed report and the potential for strong placement increases added to the market pressure.

Feeder cattle receipts at Missouri auctions this week totaled. 35,126 head. Compared to last week, feeder steers and heifers were mostly steady, although several sales in the second half of the week were steady to 5.00 higher. The attitude of the market went from lackluster to bullish very quickly on Wednesday morning with the development of the cash cattle trade. Feeder steers medium and large 1 weighing 626 pounds averaged 144.16 per hundredweight. Feeder heifers weighing 620 pounds brought 128.51.

Lean hog contracts settled .50 to 1.45 higher. The combination of sharp losses in the cattle futures as well as firmness in pork cutout values at the end of the week has brought additional focus on unwinding price spreads between the cattle and hog complex which developed earlier in the week.

Barrows and gilts in the Iowa/Minnesota direct trade closed 1.79 lower at 68.71 weighted average on a carcass basis, the West was down 1.66 at 68.77, and nationally the market was 2.17 lower at 68.56. Missouri direct base carcass meat price was steady from 63.00 to 65.00. Illinois direct trade hogs on a live basis were 1.00 lower from 40.00 to 50.00.

The pork carcass cutout value was up 1.65 at 81.91 FOB plant. Only ribs and hams were lower.

Feeder pig receipts nationally this week were 66,645 head, significantly less than the previous week and last year. Early weaned pigs’ trended steady to 1.00 lower. All feeder pigs were 2.00 higher. The demand was moderate for moderate offerings. Early weaned pigs on a 10-12 pound basis traded from 42.00 to 55.00 per head. 40 pound pigs ranged from 70.00 to 80.00. Prices quoted are on a per head basis delivered to the buyer’s farm. Prices include freight and fees on a farm to farm basis.

The weekly hog slaughter was estimated by USDA at 2,280,000 head down 83,000 from last week, but 71,000 more than last year.