Market News

Cattle futures hit hard by on feed, inventory numbers

Chicago Mercantile Exchange live cattle futures were sharply lower, pressured by last Friday’s USDA cattle on feed and inventory numbers. Those reports confirmed recent talk of the continued expansion of the U.S. herd and the huge jump in placements implies a lot of beef hitting the market late this year and early next year. August was down $2.55 at 4113.87 and October was $3.00 lower at $114.40.

Feeder cattle were sharply lower on those USDA numbers from last week. August was $4.50 lower at $148.45 and September was down $4.47 at $148.67.

Direct cash cattle markets were quiet with the big focus of the day the distribution of this week’s new showlist. The ready numbers this week are larger than last week in most of the major feeding areas, except for Texas, which looks smaller. Asking prices are expected to start around $122 on the live basis and $192 dressed. Widespread business is not expected until at least Wednesday. Last week, formula totals were smaller, especially in Nebraska and Texas, and trade volume totals were mixed, up in Nebraska, a little bit higher in Kansas, and smaller in Texas.

Boxed beef closed firm to sharply higher on moderate to fairly good demand for moderate offerings. Choice was up $.55 at $207.46 and Select was $3.09 higher at $197.89. The estimated cattle slaughter of 112,000 head was up 2,000 on both the week and the year.

The USDA says that at the open of the Oklahoma National Stockyards feeder cattle auction Monday, feeder steers and heifers were sharply lower, especially heavier weights, probably as a function of last week’s on feed and inventory numbers. Demand was moderate with mostly average quality. 75% of the early offering were steers and 82% of the run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 700 to 800 pounds sold at $144 to $141.50 and 800 to 900 pounders were reported at $143.50 to $147.50. Medium and Large 1 600 to 700 pound feeder heifers ranged from $138 to $148.25, with a load of calves averaging 612 pounds at $137, and 700 to 800 pound heifers brought $140.

Lean hog futures were lower on cash and wholesale pressure, along with spillover from the drop in cattle. Losses were limited by contracts’ discount to the cash index. August was $.72 lower at $80.37 and October was down $.77 at $66.45.

Cash hogs were mostly steady to lower. Buyers are trying to extend last week’s efforts to pay less while moving plenty of negotiated numbers and are also watching wholesale business. Last week’s slaughter could be an indication that the expansion of market ready numbers is really starting to get underway. USDA last week reported record monthly pork production during June, but Monday’s cold storage report implied strong demand for pork, especially bellies.

Iowa/Southern Minnesota direct barrows and gilts closed $.65 lower at $77 to $83.50 for a weighted average of $82.92, the Western Cornbelt was $.66 lower at $77 to $83.50 with an average of $82.88, and national direct business was $.93 lower at $77 to $83.50 for an average of $82.39. Butcher hogs at the Midwest cash markets were steady to $2 lower at $54 to $66. Missouri direct butchers were steady to $1 lower at $79 to $81 on light to moderate supply and demand. Sows were steady to $6 higher at $52 to $64.

Pork closed $.57 lower at $102.21. Loins, picnics, hams, and ribs were lower. The estimated hog slaughter of 413,000 head was down 4,000 from last week and 15,000 from last year.