Market News

Cattle, hog futures limit down on fundamental pressure

At the Chicago Mercantile Exchange, live and feeder cattle futures ended the day limit down, on follow-through selling with additional pressure from the ongoing deterioration of wholesale values, and the significant drop in the cash market this week.  All contracts will trade with expanded limits on Friday. April live cattle closed $4.50 lower at $92.82 and June live cattle closed $4.50 lower at $83.07.  April feeder cattle closed $6.75 lower at $110.67 and May feeder cattle closed $6.75 lower at $111.65. 

Direct cash cattle trade activity has been very limited following the light business on Wednesday.  It appears the tone for the week has been set, and that’s significantly lower.  Live deals on Wednesday were $112 to $113, $7 to $8 lower than last week’s weighted averages.  There were a handful of dressed deals in the North at $180, about $9 lower than last week’s weighted averages.  Asking prices will likely be restated around $114 to $115 live in the South and $183+ dressed in the North. 

At the Huss Livestock Market in Nebraska, compared to last week, steers under 600 pounds sold $2 to $3 lower with the feeder cattle trending $10 to $15 lower, with some lots of heavier steers $18 lower on the day.  On comparable offerings, feeder heifers sold $10 to $15 lower.  The USDA says the sale pace was slow, and buyers were very selective.  However, demand was good for replacement type heifers going to the breeding pasture this summer.  Bidding and buying were very active from the large crowd on hand and online.  Receipts were up on the week and down slightly on the year.  Feeder supply included 55 percent steers and 67 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 700 to 744 pounds brought $123.75 to $128.50 and feeder steers 800 to 844 pounds brought $110.75 to $117.50.  Medium and Large 1 feeder heifers 600 to 643 pounds brought $123.50 to $130. 

Boxed beef closed sharply lower on light demand and offerings.  Select and Choice round cuts were firm, while chuck and loin cuts were lower.  Select and Choice rib cuts were steady to weak.  Choice closed $2.53 lower at $232.64 and Select closed $3.01 lower at $222.12.  The Choice/Select spread closed at $10.52.    

Estimated cattle slaughter is 115,000 head – down 8,000 on the week and down 5,000 on the year. 

Lean hog futures ended the day sharply lower on follow-through selling, sharply lower wholesale values, and the weakness in the cash trade.  April lean hogs closed $4.50 lower at $44.70 and May lean hogs closed $4.50 lower at $45.47. 

Cash hogs closed sharply lower with moderate negotiated purchases.  Domestic demand and been relatively strong, but with the social distancing restrictions in place and limited buying by end users, the heavy supplies are forcing negative prices.  The short-term outlook is very negative right now, but long-term there is still optimism in the industry demand for US pork will grow.  Especially looking at the global demand picture as protein supplies are short and the US is well positioned to fill those gaps. Barrows and gilts at the National Daily Direct closed $3.76 lower with a base range of $40 to $50.50 for a weighted average of $44.61; the Iowa/Minnesota closed $7.04 lower for a weighted average of $43.62; the Western Corn Belt closed $6.98 lower for a weighted average of $43.68.  The Eastern Corn Belt was not reported due to confidentiality. 

Butcher hog prices at the Midwest cash markets are $2 lower at $34. 

Pork values closed sharply lower again – down $3.84 at $59.21.  Butts dropped $21 and picnics were almost $10 lower.  Ribs, bellies, and hams were also lower.  Loins closed higher. 

Estimated hog slaughter is 488,000 head – down 9,000 on the week and up 18,000 on the year.  Wednesday’s hog slaughter has been revised to 476,000 head.