Market News

Cattle futures fall despite solid fundamentals

Chicago Mercantile Exchange live and feeder cattle futures were lower on technical selling and at least some disappointment over the weekly export sales numbers. That caused traders to ignore the session’s positives: higher direct cash and wholesale business and the lower move in corn. Beef exports of 14,100 tons were only slightly above a week ago, primarily to South Korea, Japan, and China. December live cattle was down $.15 at $153.42 and February was $.17 lower at $156.85. November feeders were $.70 lower at $178.12 and January was down $.80 at $180.45.

Direct cash cattle trade was light to moderate at higher prices, supported by demand expectations and tighter market ready numbers. On the live basis in Kansas and Texas, sales were mainly at $150, $2 higher than last week’s weighted average, and dressed in Nebraska was mostly at $240, about $4 higher, with one regional paying as much as $244, possibly for delivery early next week. Asking prices for what’s left on the live basis were $151 to $152 in the south and $155 to $156 in the north, with asking prices on the dressed basis at $242+.

Boxed beef at midday closed higher with moderate to heavy movement. Choice was up $1.63 at $262.49 and Select was $3.31 higher at $231.91. The estimated cattle slaughter of 128,000 head was steady on the week and up 5,000 on the year.

At the Clarinda Livestock feeder cattle sale in Iowa, the USDA says many load lots of steers and yearling heifers were on offer with strong demand. The strongest demand was for new crop spring calves, which were $4 to $6 higher. Receipts were up on the week and the year. 57% of the offering were steers and 51% of the total run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 700 to 800 pounds were reported at $155 to $181.75 with 831-to-843-pound steers at $183.25 to $184.25. Medium and Large 1 feeder heifers weighing 500 to 600 pounds brought $174 to $186.25 and 600 to 700 pound heifers sold at $156 to $183.50.

Lean hog futures were sharply lower, pressured by the steady to sharply lower cash business during the session and the week-to-week drop in export sales. Wholesale pork was higher at midday but has been on a mostly lower trend this week. The USDA says pork exports of 20,300 tons were down sharply on the week, mainly to Mexico and China. December lean was $3.37 lower at $85.12 and February was down $2.85 at $88.15.

Cash hogs were steady to lower with light closing negotiated sales at the major direct markets. Buyers issued lower bids having moved the needed ready supplies earlier this week and did not add all that many numbers in between the open and the close. That continues the procurement pattern of the last few months, with another round of lower business likely to end the week.

National direct barrows and gilts closed $6.99 lower at $87 to $100.98 with a weighted average of $91.99, while Iowa/Southern Minnesota was down $2.09 and the Western Corn Belt was $2.03 lower, with both averaging $98.75. Butcher hogs at the Midwest cash markets were $2 lower at $58. Illinois direct sows were steady at $59 to $71 on heavy demand for moderate offerings. Barrows and gilts were steady at $58 to $68 on moderate demand and offerings. Boars ranged from $9 to $35.

Pork closed $.72 higher at $98.46. Loins, butts, and bellies were modestly to sharply higher, while picnics, ribs, and hams were lower. The estimated hog slaughter of 491,000 head was unchanged on the week and up 10,000 on the year. Wednesday’s slaughter was revised to 484,000 head, 7,000 less than the initial projection.