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Continued decline in boxed beef prices pressures cattle futures

At the Chicago Mercantile Exchange, live and feeder cattle ended the day lower, pressured by the continued slide in boxed beef prices.  October live cattle closed $.80 lower at $122.80 and December live cattle closed $1.05 lower at $127.52.  September feeder cattle closed $1 lower at $154.87 and October live cattle closed $.72 lower at $156.37. 

It was a quiet end to the week for direct cash cattle trade following the light to moderate business that took place earlier in the week.  Live deals were at mostly $123 to $124 in the South, steady with the previous week’s weighted averages.  Dressed deals were mostly $200, $1 lower than last weeks weighted average basis in Nebraska. 

At the Mitchell Livestock Auction in South Dakota, compared to last week feeder steers 850 to 1050 pounds were $2 to $4 lower.  Feeder heifers 750 pounds and up were $1 to $3 lower.  The USDA says demand was fair with many load lots in the day’s offerings.  Receipts were down on the week and the year.  Feeder supply included 51% steers and 99% of the offering was over 600 pounds.  Medium and Large 1 feeder steers 858 to 878 pounds brought $149.50 to $155.50 and feeder steers 907 to 933 pounds brought $144.50 to $157.10.  Medium and Large 1 feeder heifers 818 to 845 pounds brought $140.35 to $149.50 and feeder heifers 922 to 949 pounds brought $138.75 to $140.75. 

At the South Dakota hay market, alfalfa remains steady.  The USDA says demand is very good for all qualities and classes of hay as the severe drought conditions have greatly reduced grazing and supplies of forage.  Cow/calf operators are beginning to wean calves early to stretch their feed supplies and keep their cow herds intact.  Rain remains elusive in parts of the state, forcing some producers to completely liquidate their herds.  Corn silage harvest is in full swing.  There was a 4th cutting of hay where rains finally fell and allowed enough regrowth for another cutting.  Alfalfa, premium large squares brought $200 to $250.  Alfalfa/grass mix, premium, large squares brought $200.  Alfalfa/grass mix, premium large rounds brought $140.  Alfalfa/grass mix, fair, large squares brought $140.  Grass, fair large rounds brought $140. 

Boxed beef closed lower on light demand for large offerings.  Choice is $3.53 lower at $314.47 and Select closed $.52 lower at $279.75.  The Choice/Select spread is $34.72. Estimated cattle slaughter is 118,000 head, down 3,000 on the week and up 6,000 on the year.  Saturday’s estimated kill is 67,000 head – 24,000 on the week and down 34,000 on the year. 

Lean hog futures ended the day higher, supported by the sharply higher pork values during the session.  October lean hogs closed $.25 higher at $85.72 and December lean hogs closed $.60 higher at $75.05. 

Cash hogs closed weak with a fairly light negotiated run.  Processors continue to monitor the availability of market-ready barrows and gilts and have been able to move their desired numbers at lower bids recently.  Demand for US pork on the global market and domestically has been strong, which the industry does expect to continue. Barrows and gilts at the National Daily Direct closed $.16 lower with a base range of $79 to $89.25 and a weighted average of $81.48; both the Iowa/Minnesota and the Western Corn Belt closed with a weighted average of $82.42.  Prices at the Eastern Corn Belt were not reported due to confidentiality. 

According to this week’s Feeder Pig Report from the USDA, early-weaned pigs and all feeder pigs were steady to $1 per head higher.  Demand was moderate for moderate offerings and receipts included 49% formulated prices.  The Total Composite cash range was $36 to $54 with a weighted average of $49.01.  The Total Composite formula range was $39.65 to $51.14 and a weighted average of $44.95.  The weighted average for all early-weaned pigs was $46.29 and the weighted average for all feeder pigs was $71.78. 

At Illinois, slaughter sow prices were mostly $1 lower with good demand for light to moderate offerings at $59 to $75.  Barrows and gilts were $1 to $2 lower with good demand for moderate offerings at $49 to $59.  Boars ranged from $30 to $40 and $12 to $18. 

Pork values closed lower – down $.56 at $105.41.  Bellies and loins were sharply lower.  Picnics and ribs were lower.  Butts and hams were higher and sharply higher. Estimated hog slaughter is 470,000 – up 3,000 on the week and up 7,000 on the year.  Saturday’s estimated kill is 185,000 head, down 162,000 on the week and down 11,000 on the year. 

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