Market News

Cattle and hog futures closed sharply lower

There were a few scattered bids on the cattle on Friday afternoon at 103.00 in Kansas and 160.00 dressed in Nebraska. However, business was essentially done for the week, especially given the fact that cattle futures closed sharply lower. The weekly kill totaled 611,000 head, 19,000 above last week, and 42,000 greater than 2015.

Boxed beef cutout values were lower to sharply lower on light to moderate demand and light offerings. Choice beef was down 2.42 at 187.35, and select 177.87, down 1.07.

Live cattle futures contracts on the Chicago Mercantile Exchange settled 2.47 to 3.00 lower on Friday. Any hope of rebuilding support in the live cattle complex at the end of September was quickly dashed as sharp losses flooded the complex. Front month October closed at 98.90, limit lower. This would be the first monthly close under 100.00 per hundredweight in over six years and an extremely bearish way to start out the fourth quarter and month of October.

Feeder cattle finished the session 3.62 to 4.36 lower. Traders focused on the overall lack of support in the entire livestock market as well as the widespread pressure and limit losses in the live cattle contracts. The close at these lows would be the lowest monthly low since 2010.

Feeder cattle receipts at Missouri auctions this week totaled 20,500 head. Compared to last week, feeder steers and heifers were steady to 5.00 lower. The cattle market continues to encounter falling prices, despite the short lived rebound from last week. Buyers are looking for those weaned calves that are participating in health programs, which is consistent with this time of year. The weather is starting to cool off and buyers do not want to worry about sick calves. Feeder steers medium and large 1 averaging 677 pounds traded at 138.79 per hundredweight. 672 pound heifers traded at 130.94.

Lean hog futures settled 1.02 to 3.00 lower as they quickly fell through any sense of a thin layer of support that may have been holding the market together over the last couple of days. After initial buyer support was unable to hold at the opening bell, sellers quickly moved back into the market and moved through the contract lows like they were hot butter.

Barrows and gilts in the Iowa/Minnesota direct trade closed .47 lower at 48.75 weighted average on a carcass basis, the West was down .41 at 48.72, and nationally the market was .75 to 1.25 lower at 48.27. Missouri direct base carcass meat price was 1.00 lower from 44.00 to 46.00.

The pork carcass cutout value was down .13 at 73.92 FOB plant.

The quarterly hog and pig report released on Friday looks somewhat bearish with all three major categories coming in larger than expected. The summer pig crop turned out to be larger than expected, 2% larger than 2015. Analysis of the report can be found on our website.

The weekly hog slaughter was estimated at 2,436,000 head, 19,000 less than last week, but 167,000 more than last year.