Market News

Hog futures higher ahead of bearish report

At the Chicago Mercantile Exchange, cattle futures closed higher despite mixed fundamentals on a reversal from yesterday.  Prices have dropped enough to generate increased buyer interest.  August live cattle closed $1.00 higher at $103.72 and October contracts closed $.87 higher at $107.02.  August feeder cattle closed $1.05 higher at $146.82 and September contracts closed $.90 higher at $147.37.

The majority of direct cash cattle trade could be wrapped up for the week.  Cattle country has been quiet with just a few scattered bids reported.  We might still see some cleanup business to wrap up the week.  Asking prices for the cattle left on showlists are around $108 live and $173 dressed with bids at $106 live and $169 to $170 dressed.

At the Mitchell Livestock Auction in South Dakota receipts were down on the week.  It was a very light test with steers and heifers steady to firm in a narrow comparison. The USDA says demand was mostly moderate with better demand seen for lots of backgrounded steers and heifers.  Flesh condition was moderate to moderate plus.  Feeder supply included 49 percent steers and 97 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 589 to 595 pounds brought $171 to $172.50 and feeder steers 938 to 939 pounds brought $130.10 to $130.80.  Medium and Large 1 feeder heifers 752 to 787 pounds brought $133.75 to $139.85 and feeder heifers 927 to 939 pounds brought $117 to $121.75.

Boxed beef cutout values closed sharply lower on Choice and steady on Select on light to moderate demand and offerings.  Choice down $2.06 at $213.24 and Select down $.22 at $200.66.  The Choice/Select spread closed at $12.58.  Estimated cattle slaughter is 120,000 head – up 1,000 on the week and 5,000 on the year.

Lean hog futures closed higher on support from pork values.  They closed at their highest level since last August and were up another $.20 at midday.  Today’s export data was also positive.  However, the Hogs and Pigs report was extremely bearish, and the higher prices could be short-lived and tariff and trade concerns are still a major pressure point for markets.  July lean hogs closed $.90 higher at $81.12 and August contracts closed $.67 higher at $75.72.

Cash hogs ended the day higher with light negotiated sales.  Hotter temperatures were likely a factor.  Processing margins have improved some and buyers had to dig deeper this afternoon to move numbers.  The market remains nervous with the large hog supply – which is larger than expected from the looks of the latest Quarterly Hogs and Pigs report and the continued negative trade rhetoric.  Any disruption to demand would be costly to US pork producers.

Barrows and gilts at the Iowa/Southern Minnesota ended the day $.65 higher with a range of $75 to $78.50 with a weighted average of $77.72; the Western Corn Belt closed $.54 higher with a range of $69 to $78.50 for a weighted average of $77.56; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct is $.08 higher with a range of $69 to $78.50 for a weighted average of $77.10.

Butcher hogs at the Midwest cash markets are $1 lower at $52 to $57.   At the Interior Missouri Direct, receipts are up on the week and the year.  Barrows and gilts are steady at $69 to $70 with light to moderate supply and demand.  Sows are steady at $34 to $44.  At Illinois, slaughter sow receipts are down on the week and the year.  Prices are steady at $34 to $48 with moderate demand for moderate to heavy offerings.  Barrows and gilts are steady at $46 to $55 with moderate demand for moderate offerings.

Pork cutout values closed steady – down $.07 at $87.59.  The primals are mixed with strong gains in the picnic, belly, and loin, however there was a sharp decline in the ribs and the hams.  Estimated hog slaughter is 450,000 head – up 6,000 on the week and 7,000 on the year.