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Hog futures drop as cash shoots higher

Chicago Mercantile Exchange live and feeder cattle were up solidly, supported by the higher midday boxed beef and lower corn, with traders getting ready for widespread direct business. August live was up $1.55 at $141.30 and October was $1.87 higher at $145.67. August feeders were $1.60 higher at $181.52 and September was up $2.47 at $185.47.

Direct cash cattle markets were quiet. Packer inquiry was light, with a few scattered bids by regional buyers at $236 on the dressed basis in Iowa and Nebraska. Asking prices were $142 to $145 live, with no asking prices reported for dressed business. Interest is expected to start picking up Wednesday. The USDA’s Cattle on Feed numbers are out Friday afternoon, with many analysts expecting the report to reflect the drought conditions being experienced in some of the major feeding areas.

At the Tri-State Livestock Auction in McCook, Nebraska, compared to the previous week, feeder steers were steady to $11 higher, but heifers were $2 to $9 lower. The USDA says demand was good for all weights. 61% of the run were steers and 78% of the total supply weighed less than 600 pounds. Receipts were up sharply on the week with no comparison to a year ago. Medium and Large 1 feeder steers weighing 400 to 500 pounds ranged from $212 to $244 and 500 to 600-pound steers brought $200 to $225.50. Medium and Large 1 feeder heifers weighing 300 to 400 pounds were reported at $203 to $229 and 400-to-500-pound heifers sold at $192.50 to $214.

Boxed beef closed mixed with heavy movement. Choice was up $.98 at $265.44 and Select was down $.60 at $239.12. The estimated cattle slaughter of 126,000 head was unchanged on the week and up 4,000 on the year. Monday’s slaughter was revised to 121,000 head, 3,000 less than the initial projection.

Lean hog futures were sharply lower on profit taking, technical weakness, and concerns about pork demand linked to economic growth in China. The losses were despite the cash and wholesale business during the session and contracts’ huge discount to the cash index. October hogs were down $4.00 at $96.57 and December was $3.15 lower at $87.70.

Cash hogs were steady to sharply higher. Many buyers raised bids to move the needed near-term numbers and speed up processing after a slow start to the week, continuing the recent pattern. Market ready numbers have gotten tighter in much of the region and buyers might eventually start to make some serious cuts to chain speed to slow down spending. The industry also has an eye on domestic demand as state fair season starts to wind down.

National direct barrows and gilts closed $13.58 higher with a base price range of $114 to $135 and a weighted average of $129.19, while Iowa/Southern Minnesota was up $13.20 at $132.86 and the Western Corn Belt was $13.18 higher at $132.84. The Eastern Corn Belt was not reported due to confidentiality. Midwest butcher hog markets were steady at $75. Illinois direct sows were steady at $71 to $83 with moderate demand for moderate offerings. Barrows and gilts were unchanged at $77 to $86, also with moderate demand for moderate offerings. Boars ranged from $10 to $58.

Pork closed $3.76 lower at $121.15. The primal cuts were all weak to sharply lower, including an $11.89 drop in bellies. The estimated hog slaughter of 476,000 head was up 2,000 on the week and 5,000 on the year. Monday’s slaughter was revised to 442,000 head, 14,000 more than the earlier guess.

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