Market News

Cattle, hog futures close sharply lower on trade uncertainties

At the Chicago Mercantile Exchange, cattle futures ended the day sharply lower as the US waits for what is likely to be another round of retaliatory tariffs from China after the administration announced it would implement an additional $200-billion worth of tariffs of Chinese goods.  Feeder cattle futures also closed sharply lower as the market worries about any potential trade disruptions.  August live cattle closed $1.60 lower at $103.85 and October contracts closed $1.57 lower at $106.25.  August feeder cattle closed $2.45 lower at $149.40 and September contracts closed $2.62 lower at $149.42.

Direct cash cattle trade is sluggish with limited trade Wednesday morning in parts of Nebraska and Iowa.  Most of the day’s business – has been at the lower end of last week’s fairly wide range.  Showlists are priced around $115 and $116 live and $184 to $185 dressed with bids at $108 live and $175 dressed.

At the Hub City Livestock Auction in South Dakota, receipts are down on the week and the year.  Compared to the most recent auction, the best test was on steers 900 to 1000 pounds and 1050 to 1100 pounds – both were $5 to $8 higher.  The USDA says demand was good to very good for the offering of mostly strings and loads.  Flesh condition varied buy most were moderate to moderate plus.  Feeder supply included 85 percent steers and 99 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 909 to 927 pounds were $129.50 to $139.25 and feeder steers 965 to 999 were $123.50 to $139.50.  Medium and Large 1 feeder heifers 751 to 799 pounds were $134.50 to $138.50 and feeder heifers 996 pounds brought $121.50.

Boxed beef cutout closed steady on Choice and lower on Select.  Choice up $.12 at $207.44 and Select down $1.25 at $197.14.  Estimated cattle slaughter is 120,000 head – up 4,000 on the year.

Lean hog futures closed mostly lower.  While the nearby contract ended the day higher on light buyer support, deferred contracts closed sharply lower with the expanded trading limits.  The outlook is weakening as trade uncertainties continue.  July lean hogs closed $.27 higher at $79.77 and August lean hogs closed $.97 lower at $68.80.

Cash hogs closed lower.  Buyers have been able to move fairly decent numbers with steady to lower bids and will continue to work that angle in order to reduce processing margin losses.  The trade continues to monitor pork demand. The administration announced more tariffs on China after the country’s retaliatory tariffs went into effect last week.  With this exceptionally large hog supply – any disruption to trade would be costly to US pork producers.  Barrows and gilts at the Iowa/Southern Minnesota closed $.41 lower with a range of $74 to $76.99 for a weighted average of $75.86; the Western Corn Belt was down $.35 with a range of $68 to $76.99 for a weighted average of $75.84; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.30 lower with a range of $68 to $76.99 and a weighted average of $75.88.

Butcher hogs at the Midwest cash markets are steady to $2 higher at $51 to $60. At Illinois, slaughter sow prices are $2 lower at $30 to $40 on moderate demand for heavy offerings. Barrows and gilts are steady at $45 to $54 on moderate demand and offerings. Boars ranged from $8 to $32.Pork cutout

Pork value closed weak – down $.50 at $83.60.  The primals were mostly lower with more than $3 declines in the picnics and the butts.  The bellies and the ribs both closed higher.  Estimated hog slaughter is 456,000 – up 15,000 on the year.