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Hog futures higher ahead of USDA report

At the Chicago Mercantile Exchange, live cattle ended the day mixed, mostly higher on spread adjustments.  Feeder cattle closed higher, supported by the day’s lower move in corn.  June live cattle closed $.87 higher at $94.17 and August live cattle closed $.27 lower at $96.07.  August feeder cattle closed $.37 higher at $133.25 and September feeder cattle closed $.32 higher at $134.50. 

Another light round of direct cash cattle trade took place on Thursday.  Live deals in the South were reported at $95 to $97, that’s steady to $2 lower than Wednesday’s business and up to $6 lower than last week’s weighted averages.  Northern dressed business had a range of $152 to $155, steady to $1 lower than Wednesday’s business.  This follows the light to moderate trade that took place on Wednesday. 

At the Mitchell Livestock Auction in South Dakota, compared to last week’s much lighter offering feeder steers and heifers are steady to firm.  The USDA says demand is good to very good for the large offering of backgrounded yearling steers and heifers.  There were many long strings of light to moderate fleshed yearlings offered in full loads and multiple load lots.  Receipts were up on the year.  Feeder supply included 40 percent steers and 95 percent of the offering was over 600 pounds. Medium and Large 1 feeder steers 854 to 874 pounds brought $125 to $130 and feeder steers 952 to 981 pounds brought $115 to $119.75.  Medium and Large 1 feeder heifers 808 to 843 pounds brought $117.50 to $122.50 and feeder heifers 904 to 947 pounds brought $105.50 to $112.75. 

Boxed beef closed lower on light demand for moderate to heavy offerings.  Choice is $1.43 lower at $208.26 and Select is $1.76 lower at $199.93.  The Choice/Select spread is $8.33.  Estimated cattle slaughter is 120,000 head – even on the week and down 3,000 on the year. 

Lean hog futures ended the day higher, supported by the higher wholesale and cash prices during the session.  July lean hogs closed $1 higher at $46.92 and August lean hogs closed $.07 higher at $51.32. 

Cash hogs closed firm to higher with moderate negotiated numbers.  Supplies of market-ready barrows and gilts are heavy, but processors are keeping the supply chain moving as daily slaughter capacity continues to push to pre-COVID-19 levels.  Demand matters for the rest of 2020.  The industry needs to see both strong domestic and global demand for any price support.  Barrows and gilts at the National Daily Direct closed $.22 higher with a base range of $24 to $31.50 for a weighted average of $28.71; the Iowa/Minnesota closed $1.50 higher for a weighted average of $29.86; the Western Corn Belt closed $1.03 higher for a weighted average of $29.37.  The Eastern Corn Belt was not reported at midday due to confidentiality. 

Butcher hog prices at the Midwest cash markets are steady at $20.  At Illinois, slaughter sow prices were $2 higher with moderate to good demand for light to moderate offerings at $9 to $20.  Barrow and gilt prices were $2 higher with moderate to good demand for moderate to heavy offerings at $12 to $20.  Boars ranged from $2 to $5. 

Pork values closed lower – down $2.63 at $65.05.  Hams and ribs were sharply lower.  Loins and butts were lower.  Picnics were sharply higher and bellies were higher.  Estimated hog slaughter is 472,000 head – up 7,000 on the week and down just 5,000 on the year. 

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