Market News

Hog futures close higher, cattle lower

Feedlot country was very slow on Tuesday afternoon with neither buyers nor sellers displaying any interest in doing business. That should begin to change on Wednesday, at least in terms of better defined bids and asking prices. The guess is most producers will start out pricing cattle around 128.00 or better in the South, and 204.00 to 205.00 plus in the North. The cattle kill was estimated at 112,000 head, 3,000 less than last week, and down 1,000 from last year.

Boxed beef cutout values were weak on choice and higher on select on light to moderate demand and offerings. Choice beef was down .41 at 220.14, select was 1.56 higher at 213.89.

Live cattle contracts on the Chicago Mercantile Exchange settled .55 to 1.42 lower. Widespread weakness developed in the live cattle trade despite the lackluster and mixed trade seen early in the session. The inability to spark additional buyer support from Monday’s upward market shift allowed widespread liquidation to step back into the complex. April futures led the market lower with prices down 1.42. This eroded prices below the 117.00 per hundredweight level. At this price level live cattle markets remain stuck in the wide trading range seen over the last two months.

Feeder cattle ended the session .47 to 1.07 lower as sharp pressure flooded through the feeder cattle trade on Tuesday This weakness led to aggressive triple digit pressure in all contracts through the first couple of hours on Tuesday. Prices did back away from session lows and only September suffered a triple digit loss. The underlying pressure in live cattle markets continues to bring uncertainty to the entire complex, according to DTN.

The Oklahoma National Stockyards on Monday had receipts of 7,100 feeder cattle. Compared to last week feeder steers and steer calves traded steady to 3.00 higher. Feeder heifers and heifer calves were mostly 2.00 to 4.00 higher except 6 weights 6.00 higher. The demand was moderate to good for feeders. The demand continues to be very good for thin fleshed cattle headed to grass. Quality was plain to attractive. Feeder steers medium and large 1 averaging 719 pounds brought 136.00 per hundredweight. 727 pound heifers traded at 122.69.

Lean hogs settled .10 to .60 higher as strong follow through support moved into the complex. Although off the day’s highs the April contract led the market higher as traders focused on firmer pork values and the ability to expand early week gains. Some additional market spreading appeared to take place in nearby contracts following the aggressive shift lower in the cattle trade.

Barrows and gilts in the Iowa/Minnesota direct trade closed 1.46 lower at 66.39 weighted average on a carcass basis, the West was down .80 at 66.94, and nationally the market was .55 lower at 66.46. Missouri direct base carcass meat price was steady to 1.00 lower from 58.00 to 61.00. Illinois direct trade hogs on a live basis 1.00 higher from 40.00 to 49.00. Sows steady 26.00 to 37.00.

The pork carcass cutout value was up .40 at 82.76 FOB plant.

With the March 1 Hogs and Pigs report scheduled for release on March 30 many are expecting to see further confirmation of herd expansion. It may be very difficult to build deferred lean premiums at this time according to DTN analysts.

Tuesday’s hog kill was estimated at 433,000 head, 10,000 less than last week, and the same as last year.