Market News

Hog futures down on bearish fundamentals

Chicago Mercantile Exchange live cattle futures were supported by commercial buying as traders prepared for widespread direct business and the USDA’s Cattle on Feed report out Friday afternoon. August was up $2.30 at $104.97 and October was $.87 higher at $101.10.

Feeder cattle were up on the same factors as the live pit, largely ignoring the day’s mixed activity in corn. August was $1.02 higher at $138.40 and September was up $1.12 at $136.42.

Direct cash cattle markets were mostly at a standstill. Light trade was reported at $105 live in Kansas and $108 live in Nebraska, along with $170 to $178 dressed in Iowa and Nebraska, but not enough to establish a trend and most of the major feeding areas didn’t show much interest in business. Asking prices were $108 to $109 live and $178 to $180 dressed, with bids of $105 live and $172 to $176 dressed. The bulk of the week’s trade will wait until after Friday’s USDA Cattle on Feed numbers. On average, the total number of cattle on feed is expected to be up fractionally on the year, while placements could be just about unchanged and marketings might be sharply higher. Cash prices are expected to improve from the last few weeks because of the recent trend in the wholesale market, but that is showing signs of topping out. Weekly beef export sales were 17,300 tons. The USDA says beef in cold storage at the end of July was more than 455 million pounds and commercial production was up 6% on the year.

Boxed beef closed mixed on light to moderate demand for light offerings. Choice was down $2.46 at $239.28 and Select was up $.21 at $215.91. The estimated cattle slaughter of 115,000 head was down 1,000 on the week and 3,000 on the year.

At the Valentine Livestock Auction feeder cattle sale in Nebraska, compared to the last test, 900-pound steers were steady with no comparable offering for heifers. The USDA says demand was good with cooler weather, while receipts were down slightly from two weeks ago. 76% of the feeder cattle offering were steers and 98% of the run weighed more than 600 pounds, Medium and Large 1 feeder steers weighing 700 to 800 pounds sold at $152 to $158.50 and 800 to 900-pound steers ranged from $141.50 to $152.50. Medium and Large 1 feeder heifers weighing 800 to 900 pounds were reported at $131.50 to $141.25 and 900 to 1,000-pound heifers brought $124 to $134.25.

Lean hog futures were lower, coming under another round of cash and wholesale pressure, along with position squaring ahead of the Cold Storage and Livestock Slaughter numbers. The trade was also disappointed by a lack of new export sales to China last week. October was down $1.00 at $62.30 and December was $1.12 lower at $61.55.

Cash hogs were lower with heavy closing negotiated sales for the major direct markets. Buyers were able to extend their efforts to move those ample market ready numbers at lower prices, watching margins and demand signals. Weekly pork exports were down on the week at 18,500 tons, with no new sales to China. African Swine Fever continues to spread, including this week’s report of a case in Russia, near the border with China. After the close, the USDA confirmed record commercial red meat and pork production during July and said there were more than 600 million pounds of pork in cold storage at the end of the month.

Pork closed $1.30 lower at $79.94. All the primal cuts were lower, including a $2.90 loss in bellies and a $2.89 decline for picnics. The estimated hog slaughter of 482,000 head was 1,000 less than last week, but 14,000 more than last year.

National direct barrows and gilts closed $1.39 lower at $57 to $71.50 for a weighted average of $66.15, while Iowa/Southern Minnesota was down $2.65 at $65.35, the Western Corn Belt was $2.27 lower at $65.26, and the Eastern Corn Belt was down $.91 at $66.72. Butcher hogs at the Midwest cash markets were $3 lower at $47 to $53. Illinois direct sows were weak at $28 to $43 on moderate demand for moderate to heavy offerings. Barrows and gilts were $1 lower at $40 to $48 with moderate demand and offerings. Boars ranged from $8 to $27.