Market News

Demand concerns pressure hog futures

At the Chicago Mercantile Exchange, cattle futures closed mostly lower, except for the soon to expire October contracts.  The trading session was light and weak ahead of widespread direct cash business and position squaring ahead of Friday’s Cattle on Feed report.  December live cattle closed $.40 lower at $117.37 and February live cattle closed $.35 lower at $121.47.  November feeder cattle closed $.87 lower at $153.35 and January feeder cattle closed $.87 lower at $149.07.

A light trade developed in parts of Nebraska and Iowa.  Dressed deals were at $173 to $174, mostly at $174, fully steady with last week’s weighted average basis in Nebraska.  Live deals ranged from $108 to $111, mostly $110 to $111, steady to weak compared to last week.  Significant trade volume is expected to develop Thursday or Friday.

At the Ozarks Regional Stockyards in Missouri, receipts are down on the week and the year.  Compared to last week feeder steers and heifers were $5 to $10 lower with spots of $15 lower.  Yearlings were not well tested, however they traded with a lower undertone.  The bulk of the offering was unweaned calves, which struggled with demand, especially with the colder temperatures, rain, and mud.  Feeder supply included 48 percent steers and just 10 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 400 to 500 pounds brought $166 to $180 and feeder steers 500 to 600 pounds brought $153 to $167.   Medium and Large 1 feeder heifers 400 to 500 pounds brought $138 to $149 and feeder heifers 500 to 600 pounds brought $135 to $147.

Boxed beef cutout values closed lower on light to moderate demand and offerings.  Choice closed $.05 lower at $204.56 and Select closed $1.36 lower at $191.19.  The Choice/Select spread closed at $13.37. Estimated cattle slaughter is 118,000 head – down 1,000 on the week and even the year.

Lean hog futures closed sharply lower on pressure from the significant drop in wholesale values, the sharply lower cash prices at midday, and continued supply and demand concerns. December lean hogs closed $2.17 lower at $54.70 and February lean hogs closed $1.67 lower at $62.57.

Cash hogs lower with solid negotiate purchase totals.  The supply and demand woes continue.  While the USMCA deal should eventually help with pork demand, Senate Majority leader Mitch McConnell says it won’t be completed this year and Mexico has yet to drop their 20 percent tariff on US pork.  This week’s hog weights added even more pressure to the supply picture.  We saw a nearly 2-pound jump on the week and weights are almost a pound heavier than a year ago.  Combine that with the large slaughter runs, it’s adding a lot more pork to market that is looking anywhere and everywhere for some positive demand news. Despite the speculation that the African Swine Fever outbreak in China could help to support prices, eventually.  It is still uncertain just how much of an impact it has had on the country’s pork supply.  Barrows and gilts at the Iowa/Southern Minnesota closed $.79 lower with a range of $53 to $60.50 for a weighted average of $58.97; the Western Corn Belt closed $.78 lower with a range of $53 to $60.50 for a weighted average of $58.92; the Eastern Corn Belt closed $.76 lower with a range of $53 to $61 for a weighted average of $59.59; and the National Daily Direct closed $.66 lower with a range of $53 to $61 for a weighted average of $59.26.  Butcher hogs at the Midwest cash markets are steady in Dorchester, Wisconsin; Zumbrota, Minnesota; and Garnavillo, Iowa at $40 and $42.  Red Oak, Iowa is $1 lower at $41.

At Illinois, slaughter sow receipts are steady at $25 to $37 with moderate demand for moderate offerings.  Barrow and gilt prices are $1 lower at $34 to $42 with moderate demand for moderate offerings. Pork value values closed sharply lower – down $2.35 at $78.52.  Bellies dropped $7.06 and hams, picnics, butts, and loins were all lower.  Ribs were higher.

Estimated hog slaughter is 477,000 head – up 12,000 on the week and 14,000 on the year.