Market News

Hogs up on pork, technical support

Chicago Mercantile Exchange live cattle futures were narrowly mixed on spread trade and general consolidation. It was a pretty quiet, low volume end to the holiday week. August was down $.17 at $114.77 and October was $.05 lower at $113.82.

Feeder cattle were mixed, also on spread trade and general consolidation activity in low trade volume. August was up $.40 at $145.02 and September was $.25 higher at $145.02.

Direct cash cattle markets were quiet Friday after Thursday’s mostly moderate business. Trade was down mostly $2 from last week, primarily at $117 to $118 on the live basis in the South and $188 to $189 dressed in the North. Friday’s trade was limited to clean-up in Nebraska at $188 on the dressed basis. Packer margins are still good, but not as good as in previous weeks following the drop in the wholesale market. Given the moderate activity, it looks like at least a few cattle will be pulled into next week. Both sides are watching weather and what should be a hot, dry period in the U.S. Plains.

Boxed beef closed lower on light to moderate demand and heavy offerings. Choice was down $1.21 at 218.84 and Select was $1.25 lower at $202.51. The estimated cattle slaughter of 120,000 head was up 1,000 on the week and 12,000 on the year.

At the Valentine Livestock Auction feeder sale in Nebraska Thursday, compared to the last test two weeks ago, steers were unevenly steady with no comparable test for heifers. The USDA says demand was good and feeders made up the entire offering. 87% of the supply were steers and almost 91% of the run weighed more than 600 pounds. 730 to 800 pound feeder steers sold at $164.50 to $174.50 and 810 to 900 pounds ranged from $144 to $170. A group of feeder heifers averaging 514 pounds brought $185 and a group averaging 660 pounds was reported at $157.50 to $157.75.

The USDA says hay sales in Iowa were $5 to $7 lower. Warm, sunny conditions helped with cutting and USDA reports higher humidity hasn’t actually had much of an impact on drying. Premium small squares of alfalfa/grass sold at $225, with good quality large squares at $90 to $100 and good large rounds at $95 to $105. Fair quality large rounds of grass ranged from $70 to $75. In Nebraska, round bales of alfalfa were steady to $5 higher and squares were steady. Not much of a test on new crop grass hay, but USDA says there was a steady undertone. Ground and delivered hay was $10 higher and deheydrated pellets were steady. Buyer inquiry improved from last week because of drier than normal weather impacting pastures and forage. For east/central Nebraska, premium large squares of new crop alfalfa brought $155 with good large squares at $130 to $150 and good round bales at $70 to $785. Premium large squares of new crop alfalfa/orchard grass sold at $120 with fair large squares of old crop at $90. 17% protein dehydrated alfalfa pellets ranged from $185 to $205. For the Platte Valley, good quality round bales of new crop alfalfa were reported at $70 to $80 with ground and delivered alfalfa at $100 to $110. 17% protein dehydrated alfalfa pellets were pegged at $185 with 15% protein sun cured pellets at $160.

Lean hog futures were higher on the higher midday pork and contracts’ discount to the cash index. August outgained deferred months thanks to supply and demand expectations. Trade volume for hogs was also light. July was up $.25 at $91.72 and August was $.57 higher at $83.22.

Cash hogs were steady to lower. Market ready numbers should stay relatively tight over the near term, but expansion will start at some point. Saturday’s kill is expected to be a little more than 190,000 head, pretty small following a holiday, but that’s more of a function of available supply than packer demand.

Iowa/Southern Minnesota direct barrows and gilts closed $.59 lower at $83 to $88.50 for a weighted average of $87.47, the Western Cornbelt was down $.64 at $82 to $88.50 with an average of $87.33, and national direct business was $.36 lower at $82 to $88.50 for an average of $86.34. Butcher hogs at the Midwest cash markets were steady at $60. Missouri direct butcher trade was steady to $1 lower at $81 on light to moderate supply and demand. Sows were steady at $40 to $57. Illinois Direct sows were firm at $50 to $63 with very good demand for moderate to heavy offerings. Barrows and gilts were steady at $57 to $62 on good demand for moderate offerings. Boars ranged from $10 to $45.

Pork closed $1.12 higher at $104.94. Picnics and ribs were sharply lower, the other primals were firm to sharply higher, including a $5.73 gain in bellies. The estimated hog slaughter was 420,000 head, 6,000 more than last week, but 12,000 less than last year.

The USDA reports early weaned pigs this week were steady and all feeder pigs were steady to $1 higher. Demand was moderate for light receipts and 54% of those receipts were formula prices. The total composite formula range for early weaned pigs was $31.24 to $44 for a weighted average of $37.69 and the composite cash range was $23 to $30 with an average of $27.44, for an all early weaned average of $34.23. The composite cash range on feeder pigs was $47 to $55 with an average of $53.06.