Market News

Hog futures lower on demand uncertainty

At the Chicago Mercantile Exchange, live cattle futures ended the day higher on support from strong wholesale values and optimism about the direction of this week’s cash trade.  Feeder cattle were mostly higher on the same factors with additional support from the day’s lower move in corn.  December live cattle closed $.55 higher at $120.07 and February live cattle closed $.37 higher at $124.60.  November feeder cattle closed $.05 lower at $149.07 and January feeder cattle were unchanged at $146. 

Direct cash cattle trade started the week in its typical quiet fashion.  Showlists this week are mixed – higher in Kansas, somewhat lower in Nebraska/Colorado, and lower in Texas.  Bids and asking prices are not established as of yet.  It’s likely significant trade volume will be delayed until at least midweek or later.

At Midsession at the Oklahoma National Stockyards, receipts are up on the week and the year.  Compared to last week, feeder steers 700 to 900 pounds were $1 to $2 higher all other weights were $4 to $6 higher.  There has just been a light test of feeder heifers so far with a few sales steady to $2 lower.  Steer and heifer calves under 500 pounds have not been well tested.  Steer calves over 500 pounds have been steady and heifer calves in the same weight class $2 to $6 lower.  Demand has been moderate to good with the least action on heifers.  Quality was average and much improved from last week.  Medium and Large 1 feeder steers 519 to 549 pounds brought $155 to $167 and feeder steers 657 to 673 pounds brought $147.50 to $157.  Medium and Large 1 feeder heifers 506 to 548 pounds brought $133.50 to $143 and feeder heifers 700 to 746 pounds brought $135 to $143. 

Boxed beef closed higher to sharply higher on good demand and moderate offerings.  Choice closed $1.61 higher at $234.81 and Select closed $2.87 higher at $210.38.  The Choice/Select spread closed at $24.43.  Estimated cattle slaughter is 115,000 head – down 3,000 on the week and down 6,000 on the year.  Friday’s cattle slaughter has been revised to 118,000 head. 

With the exception of the nearby contract, lean hog futures ended the day mostly lower on concerns about the heavy supplies and ongoing demand uncertainty.  December lean hogs closed $.07 higher at $64.52 and February lean hogs closed $.67 lower at $71.90. 

Cash hogs closed mixed with strong negotiated purchase totals. The market continues to look for some glimmer of home as it relates to demand for US pork on the global market.  But until the industry finds what it’s looking for, prices will find it difficult to turn around and move higher.  Supplies of ready barrows and gilts are more than ample, and slaughter runs hit or come close to record totals almost daily.  That doesn’t support prices moving higher.   Barrows and gilts at the Iowa/Southern Minnesota closed $.52 higher for a weighted average of $46.47; the Western Corn Belt closed $.30 higher for a weighted average of $46.41; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct closed $1.67 lower with a base range of $44 to $50 for a weighted average of $46.81.

Butcher hog prices at the Midwest cash markets are $2 to $4 lower at $36.  At Illinois, slaughter sow prices were steady at $30 to $44 with good demand for moderate to heavy offerings.  Receipts were up on the week and the year.  Barrow and gilt prices were $2 lower at $28 to $34 with light demand for moderate offerings. 

Pork values closed sharply higher – up $3.11 at $78.75.  All of the primals were higher to sharply with hams leading the way.  Estimated hog slaughter is 491,000 head, even on the week and up 14,000 on the year.