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Cattle futures supported by week’s direct business

Chicago Mercantile Exchange live cattle futures were higher, supported by oversold signals and the week to date’s direct cash business, with optimism about the rest of the week’s trade. December was up $.97 at $119.07 and February was $.82 higher at $124.92.

Feeder cattle were up on the same factors as the live pit. November was $1.05 higher at $146.62 and January was up $1.22 at $144.05.

Direct cash cattle business was light to moderate. Live sales in Iowa and Nebraska ranged from $115 to $116, with dressed business at $182, $1 higher than last week’s weighted average. Wednesday’s trade was light to moderate, mainly at $115 live in Kansas and Texas, steady to $1 higher than last week. Asking prices for what was left on the showlist were $116 to $117 live and $184+ dressed, with bids at $115 live. Packer margins are solid as buyers try to keep processing running at high levels as they get ready for the slowdown around Thanksgiving.

Boxed beef closed lower on light to moderate demand for moderate to heavy offerings. Choice was down $1.28 at $241.06 and Select was $1.69 lower at $215.84. The estimated cattle slaughter of 118,000 head was unchanged on the week and down 4,000 on the year.

At the Winter Livestock Auction feeder cattle sale in Kansas, while there weren’t enough comparable weights to really form a test, a lower undertone was noted. The USDA says demand was good to very good with quality average to attractive. Receipts were down on both the week and the year. 73% of the offering were steers and 84% of the run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 850 to 900 pounds were reported at $138 to $148.75 and steers weighing 950 to 1,000 pounds sold at $131.75 to $143.25. Medium and Large 1 feeder heifers weighing 700 to 800 pounds brought $131 to $139.25 and 800 to 900-pound heifers ranged from $122 to $143.25.

Lean hog futures were lower on the lower midday pork and demand questions linked to the uncertainties about China. Also, contracts are at a premium to the cash index. December was down $.37 at $62.75 and February was $1.17 lower at $73.37.

The major direct hog markets were weak with good closing negotiated numbers. Early estimates for Saturday‚Äôs kill are around 350,000 head, which would push the weekly total to a record high, more than making up for the slow start to the week. Uncertainty about China continues to hang over the industry, with talks reportedly stalling on questions about China’s ag purchases and U.S. resistance to rolling back tariffs until phase one of the trade deal is signed. China has officially lifted restrictions on U.S. poultry imports, while Beijing’s tariff on U.S. pork remains in place. ADM estimates China’s pork production this year has declined by 20 million tons, double the previous guess and in-line with many other estimates. Two new outbreaks of ASF have been reported this week.

Pork closed $.02 higher at $87.04. Loins, ribs, and bellies were firm to higher, while butts, picnics, and hams were weak to lower. The estimated hog slaughter of 488,000 head was down 3,000 on the week, but up 12,000 on the year.

National direct barrows and gilts closed $.04 lower at $40 to $44.99 with a weighted average of $42.20, with Iowa/Southern Minnesota down $.09 at $41.80 and the Western Corn Belt $.10 lower at $41.74. Butcher hogs at the Midwest cash markets were $2 lower at $32 to $34. Illinois direct sows were $1 lower at $26 to $40 on moderate to good demand for heavy offerings. Barrows and gilts were steady at $25 to $30 with moderate demand and offerings. Boars ranged from $5 to $12.

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