Market News

Feeder cattle markets close lower

The new cattle showlists distributed on Monday appear to be generally larger than last week with only Colorado showing more steers and heifers. Early asking prices ae not well defined with feedlot operators hoping for the board to stabilize. The Monday cattle slaughter is estimated at 112,000 head, even with last week, but 2,000 more than last year.

Boxed beef cutout values were lower on moderate to light demand and offerings. Choice beef was down 1.06 at 198.42, and select was 1.23 lower at 192.34.

Chicago Mercantile Exchange live cattle contracts settled .80 to 1.27 lower with only the August up by .40. The lack of underlying fundamental support and concern the markets will continue to take out short and long term support levels caused many traders to remain bearish through the end of the month.

Feeder cattle ended the session .57 to 1.47 in the red as traders continued to search desperately for price support through the end of August. The price spread between feeder cattle and live cattle futures continues to slowly narrow, which may help to improve margin opportunities through the end of the year.

Feeder cattle receipts at the Oklahoma National Stockyards on Monday totaled 6,500 head. Compared to last week, feeder steers and heifers were 5.00 to 10.00 lower. Steer and heifer calves were lightly tested but a much lower undertone was noted. Cattle futures had a lower trend last week and they continued in the red on Monday. Slaughter cattle prices also were lower and this limited demand for all classes. The quality in Monday’s sale was mostly average, few attractive. Feeder steers weighing 650 to 700 pounds brought 141.00 to 147.00 per hundredweight. 650 to 700 pound heifers brought 126.50 to 129.50.

Lean hog futures settled .30 to .62 lower with only the October contract higher by .50. The market held light to moderate gains through midday Monday as follow through buying support continued to trickle into the market following aggressive triple digit gains. Despite buyers moving slowly back into the complex the market was unable hold the gains through the close.

Barrows and gilts in the Iowa/Minnesota direct trade closed unchanged at 61.03 weighted average on a carcass basis, the West was down .40 at 60.59, and nationally the market was .71 lower at 59.97. Missouri direct base carcass meat price closed steady to 1.00 lower from 54.00 to 58.00. Midwest hogs on a live basis were steady from 35.00 to 50.00.

The pork carcass cutout value ended the day .75 higher at 77.14 FOB plant.

The question going forward is not how much of a rally the hog market might be able to post near-term as it is how low prices may get this fall. Supplies are going to be record large, and packer capacity will be tested, and both domestic and export demand is highly uncertain.

The Monday hog slaughter was estimated by USDA at 424,000 head, 11,000 less than last week, and down 6,000 from 2015.