Market News

Cattle futures pressured by beef, waiting for direct cash

Chicago Mercantile Exchange live and feeder cattle were lower with boxed beef down at midday, getting ready for the week’s direct business. February live was down $.42 at $158.42 and April was $.80 lower at $162.22. March feeders were $2.90 lower at $183.25 and April was down $2.10 at $187.95.

Direct cash cattle markets were quiet. Asking prices are at $158 to $160 on the live basis in the south, not established yet in the north. Bids remained hard to come by, but packer inquiry should start to improve soon. This week’s show list is mixed when compared to last week. The USDA’s Cattle Inventory report was close to expectations, with the inventory down 3%, and the numbers point to at least some further degree of contraction. There were 974 head on offer at the Fed Cattle Exchange this week, 0 sold.

Boxed beef closed weak to lower with solid movement. Choice was down $1.02 at $265.07 and Select beef was $.14 lower at $252.78 for a spread of $12.29. The estimated cattle slaughter of 127,000 head was steady on the week and up 7,000 on the year.

At the OKC West Livestock Auction feeder cattle sale in Oklahoma, steers and heifers were mostly steady with a few trades of $2 to $3 higher while steer and heifer calves were had a sharply higher undertone, all on limited offerings. The USDA says demand was good for all classes, but transportation continues to be an issue in Oklahoma because of a winter storm and much colder temperatures during the first part of the week. Receipts were down on the week and the year. 61% of the feeder offering were steers and 53% of the total run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 600 to 700 pounds sold at $183.50 to $199 and 130 head of steers averaging 812 pounds were reported at $181.75. Medium and Large 1 feeder heifers weighing 500 to 600 pounds ranged from $173 to $188 and 52 head of heifers averaging 637 pounds brought $174.

Lean hog futures were pressured by the lower midday move in pork and contracts’ premium to the cash index. February was down $.90 at $73.97 and April was $2.12 lower at $84.30.

Cash hogs were steady to sharply higher with strong negotiated closing numbers. It looks like some buyers needed near-term numbers and were willing to raise bids by quite a bit. After two consecutive higher finishes, it remains to be seen if this was a short-term move or has longer legs. Thursday’s USDA weekly export sales report will be watched closely, but a bigger spotlight will fall on next week’s numbers as China gets back to business following the Lunar New Year holiday. The average Iowa/Southern Minnesota/South Dakota direct barrow and gilt weight for the week ending January 28^th was 286.8 pounds, down 2.3 from the previous week and 3.5 from last year.

National direct barrows and gilts closed $2.18 higher with a base price range of $65 to $76 for a weighted average of $73.03, while Iowa/Southern Minnesota was up $3.05 at $74.24, the Western Corn Belt was $3.01 higher at $74.08, and the Eastern Corn Belt was up $.83 at $71.85. Butcher hogs at the Midwest cash markets were steady at $60 in Dorchester, Wisconsin and $66 in Garnavillo, Iowa. Illinois direct sows were steady at $30 to $42 on light to moderate demand and offerings. Barrows and gilts were steady at $54 to $64 with moderate demand for moderate offerings. Boars ranged from $10 to $20.

Pork closed $1.30 lower at $78.95. Butts, picnics, ribs, hams, and bellies were weak to sharply lower, with loins modestly higher. The estimated hog slaughter of 490,000 head was unchanged from the previous week and 64,000 above a year ago.