Market News

Cattle futures close with triple digit gains

USDA mandatory reported the cattle trade was light on light to moderate demand in Kansas and Iowa on Tuesday. A few live sales were reported in Kansas at 110.00 with a few dressed sales from 174.00 to 175.00 in Iowa. However some producers elected to pass on the current bids, as live and feeder cattle contracts increased sharply. Trade remained slow on light to moderate demand in all other feeding regions. The cattle kill was estimated at 113,000 head, even with last week, but 2,000 more than last year.

Boxed beef cutout values were lower in the afternoon report on light to moderate demand and moderate offerings. Choice beef 196.62 down 1.80, select 191.17, 1.17 lower.

In a dramatic turnaround live and feeder cattle futures contracts on the Chicago Mercantile Exchange settled sharply higher. Live contracts ranged from .75 to 2.40 higher, and feeder cattle were up 2.05 to 4.15. Futures traded lower most of the session, but then turned sharply higher in the last hour of business. Key reversals seem evident in both the live and feeder markets. More specifically according to DTN analysts, live contracts may have confirmed the market bottom first suggested by the July lows. Sharply lower corn futures were a contributing factor to the gains in the feeder market.

Feeder cattle receipts at the Joplin, Missouri Regional Stockyards totaled 3,783 head on Monday. Feeder steers and heifers trended 4.00 to 8.00 lower than last week. The supply and demand was moderate. With nearby feeder cattle contracts down $3.78 last week, and another .85 on Monday, cash feeder prices continued to slide backward. Feeder steers medium and large 1 averaging 666 pounds averaged 143.77 per hundredweight. 704 pound replacement heifers brought 132.50.

At the Rock Valley Hay Auction in Iowa all classes of hay sold mostly steady, with a firm undertone noted for alfalfa. Premium quality alfalfa in large rounds and squares traded at 100.00 to 112.50 per ton. Good large rounds and squares brought 77.50 to 97.50 per ton. Good large rounds of grass traded from 92.50 to 100.00.

Lean hog contracts settled .20 to .70 higher as firm gains developed through the futures as traders focused on the ability to draw additional volume from the recent market surge seen over the past week. The surge in cattle futures leant additional support to the lean hog complex.

Barrows and gilts in the Iowa/Minnesota direct trade closed .62 lower at 60.37 weighted average on a carcass basis, the West was down .23 at 60.33, and nationally the market was .15 lower at 59.82. Missouri direct base carcass meat price was steady to 2.00 lower from 54.00 to 56.00. Midwest hogs on a live basis closed steady to 1.00 lower from 35.00 to 50.00.

The pork carcass cutout value was .27 higher at 77.41 FOB plant. Bellies were lower, but ribs were over $6.00 higher.

With the pork cutout now trading more than ten-dollars over the cash hog index, packer margins look quite attractive, easily cash supportive if country numbers turn more manageable, even if just temporarily in September.

The Tuesday hog kill was estimated by USDA at 435,000 head, the same as last week, but up 10,000 from last year.