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Cattle futures slide as cash prices continue to decline

At the Chicago Mercantile Exchange, live and feeder cattle closed sharply lower, pressured by the decline in cash business. February live cattle closed $5.42 lower at $163.55, and April live cattle closed $4.82 lower at $166.67.  January feeder cattle closed $4.55 lower at $210.15, and March feeder cattle closed $5.72 lower at $211.75. 

There was a light to moderate direct cash business that developed on Wednesday.  Live deals in the South were marked at $171, $3 below the prior week’s business.  Dressed business in the North was at mostly $271, $4 below the prior week’s weighted average basis.  Look for some additional trade to take place over the balance of the week.

At the North Platte Stockyards in Nebraska, steers were $2 to $4 higher, and heifers were $5 to $7 higher.  The UDSA says demand was good, with a large crowd of order buyers and some ranchers procuring cattle for next year.  Some lots were weaned, and others were short-weaned.  Receipts were down from the most recent sale and up on the year.  Feeder supply included 61% steers, and 28% of the offering was over 600 pounds.  Medium and Large 1 feeder steers 513 to 536 pounds brought $292 to $296, and feeder steers 556 to 582 pounds brought $269 to $287.50.  Medium and Large 1 feeder heifers 502 to 540 pounds brought $250 to $265.

Boxed beef closed mixed on light to moderate demand for heavy offerings.  Choice was $3.19 lower at $290.56 and Select closed $.77 higher at $259.90.  The Choice/Select spread is $30.66.  Estimated cattle slaughter was 125,000 head – even on the week and up 1,000 on the year.

Lean hog futures were mixed on spread trade.  But the long-term concerns about demand linger.  February lean hogs closed $.05 lower at $69.30, and April lean hogs closed $.15 lower at $75.95. 

Cash hogs closed mixed with a solid negotiated run.  While packers had to get more aggressive in their procurement efforts to move needed numbers Wednesday, the market, overall, has struggled.  Demand for U.S. pork on the global market has been strong and that’s been supportive to prices, but there are long-term concerns.  Some other factors have been pressuring the market, such as ample supplies of market-ready hogs and rising hog weights.  In fact, hog weights were up nearly a pound this week to 290.6 pounds, which is also 4.2 pounds above year-ago weights. Barrows and gilts at the National Daily Direct were up $.49 with a base range of $49 to $58 and a weighted average of $54.32; the Iowa/Minnesota closed $1.69 lower at $52.19; the Western Corn Belt closed $1.51 lower with a weighted average of $52.19.  Prices at the Eastern Corn Belt were not reported due to confidentiality. 

Butcher hog prices at the Midwest cash markets were not reported at midday. At Illinois, slaughter sow prices were $2 lower with moderate demand for moderate offerings at $38 to $51.  Barrows and gilts were steady, with moderate demand for moderate offerings at $35 to $45.  Boars ranged from $18 to $21 and $5 to $10. 

Pork values closed lower – down $1.47 at $83.20.  Primals were lower across the board. Estimated hog slaughter was 487,000 head – up 3,000 on the week and up 2,000 on the year. 

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