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Higher cash trade supports cattle futures

At the Chicago Mercantile Exchange, live cattle ended the day higher on support from higher cash trade and expectations for strong demand through the end of the year.  Feeder cattle were higher on the same factors with some support from the days modest move in corn.  December live cattle closed $.27 higher at $120.20 and February contracts closed $.37 higher at $124.97.  January feeder cattle closed $1 higher at $141.55 and March feeders closed $.52 higher at $141.67. 

A light to moderate direct cash cattle trade has developed in the North.  Dressed sales in Nebraska are at $188, that’s $1 higher than the prior week’s weighted average basis. The majority are marked for delayed delivery. This comes after Thursday’s light to moderate trade in the South at $119 live, also $1 higher than last week’s weighted averages. 

In Missouri last week, compared to the previous week’s sales, calves sold steady to $5 higher with some pots of $8 higher on better quality weaned calves with health programs behind them.  Yearlings sold steady to $3 higher.  The supply was heavy after many barns were closed last week for the holiday.  There was a very good showing of cattle and those with the proper paperwork were met with good demand.  Feeder supply included 60 percent steers and 46 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 550 to 599 pounds brought $123 to $178 and feeder steers 600 to 649 pounds brought $130 to $164.  Medium and Large 1 feeder heifers 500 to 549 pounds brought $120 to $154 and feeder heifers 550 to 599 pounds brought $116 to $150. 

At the South Dakota Weekly Hay market, compared to last week, alfalfa hay was steady and other kinds of hay was not well compared.  There was very good demand for dairy quality hay in large squares, most notably from out-of-state dairies that were not able to put up high-quality dry hay this year.  There was a moderate demand for lower quality round bales as there is a much greater supply.  The supply of really nice, high-quality large squares of hay is much harder to find, and the market is very active.  Alfalfa: Supreme large squares brought $300.  Premium large squares brought $250, small squares brought $6 per bale.  Good to premium, large squares brought $240.  Good large rounds brought $150 and $200 delivered.  Fair large squares brought $200.  Large rounds brought $120.  Sun-cured alfalfa pellets, 15 percent protein brought $220 and 17 percent protein brought $225.  Alfalfa meal 17 percent protein brought $230.  Grass: Good to Premium small squares brought $6 per bale.  Good large rounds brought $120.  Alfalfa/Grass Mix: Premium small squares brought $7 per bale and $252.50 per ton.  Large squares brought $225. 

Boxed beef closed lower on light to moderate demand and heavy offerings.  Choice closed $1.04 at $224.56 and Select closed $.82 lower at $207.30.   Estimated cattle slaughter is 121,000 head, up 6,000 on the week and even on the year.  Saturday’s estimated kill is 81,000 head, down 14,000 on the week and up 16,000 on the year. 

Except the nearby contracts, lean hog futures closed higher; contracts were oversold and due for a bounce, support from higher wholesale values, and optimism about trade movements with China.  December lean hogs closed $.45 lower at $61.12 and February contracts closed $.02 lower at $67.55. 

Cash hogs closed weak to lower with moderate negotiated purchases.  It’s been a positive week for price movement as buyers have had the room to bid higher.  But heavy supplies put a limit on the market’s ability to move higher for a long period of time.  Domestic demand has been strong and that’s helping to support the market, but it is still optimistic demand for US pork will see a big boost as China continues to face a pork and protein shortage in the wake of ongoing struggles with African Swine Fever.  Should there be a resolution to the trade war, it could be big things for US pork.  Barrows and gilts at the Iowa/Southern  Minnesota closed $1.06 lower for a weighted average of $45.74; the Western Corn Belt closed $.95 lower for a weighted average $46.76; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $.08 lower with a base range of $41 to $47.94 for a weighted average of $46.59.  

According to the USDA, all early-weaned pigs were $1 per head higher and all feeder pigs were steady.  The USDA says demand was moderate for moderate offerings. Receipts included 49 percent of formulated prices.  Total Composite formula range is $36.75 to $51.75 for a weighted average of $45.16.  Total Composite cash range is $25 to $44 for a weighted average of $35.01.  Total Composite Weighted average for all early-weaned pigs is $40.63 and the weighted average for all 40-pound feeder pigs is $48.33. 

Butcher hog prices at the Midwest Cash Markets are steady at $36.  At Illinois, slaughter sow prices were steady at $22 to $33 with moderate demand for moderate offerings.  Receipts are up on the week and down on the year.  Barrow and gilt prices are steady at $26 to $32 with moderate demand for moderate offerings. 

Pork values closed $.72 higher at $82.08.  Hams, picnics, bellies, and butts all closed higher.  Ribs were weak.  Estimated hog slaughter is 488,000 head, up 2,000 on the week and up 17,000 on the year.  Saturday’s estimated kill is 329,000, down 51,000 on the week and up 136,000 on the year. 

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