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Hog futures supported by higher pork values

At the Chicago Mercantile Exchange, live cattle were pressured by technical selling, feeders were mostly higher on the lower move in corn.  December live cattle closed $.42 lower at $153 and February live cattle closed $.52 lower at $156.32.  November feeder cattle closed $.25 lower at $177.87 and January feeders closed $.07 lower at $180.37. 

It was a quiet Friday for direct cash cattle business following Thursday’s light to moderate activity.  A handful of deals were reported in the South at $240 dressed, fully steady with the rest of the week’s business.  For the week, live deals in the South were at mostly $150, $2 higher than the previous week’s weighted averages.  The majority of deals in the North were at $240 dressed, nearly $5 above the prior week’s weighted average basis in Nebraska. 

At the Ogallala Livestock Auction in Nebraska, compared to last week steers were $4 to $6 higher and heifers were $1 to $8 higher.  The USDA says demand was good in person and online.  Receipts were up on the week and the year.  Feeder supply included 63% steers and 16% of the offering was over 600 pounds.  Medium and large 1 feeder steers 503 to 547 pounds brought $196 to $218 and feeder steers 601 to 644 pounds brought $183 to $203.50.  Medium and Large 1 feeder heifers 455 to 494 pounds brought $190 to $203 and feeder heifers 502 to 542 pounds brought $180.50 to $198.50. 

In Missouri this past week, the hay market is active as many producers are already feeding and sourcing supplies for winter.  The supply of hay is light to moderate, and demand was moderate.  Prices remain mostly steady.  Widespread rains fell across the state with many areas reporting anywhere from 1 to 3 inches, while it helped replenish some soil moisture, it did not help the water situation.  Alfalfa, supreme, medium squares brought $250 to $300.  Alfalfa, supreme, small squares brought $10 to $15.  Alfalfa, premium, medium squares brought $180 to $250.  Alfalfa, good large rounds brought $150 to $180.  Alfalfa, good small squares brought $5 to $9 per bale.  Alfalfa, fair, large rounds brought $125 to $150.  Alfalfa/grass mix, good/premium, small squares brought $5 to $9.  Mixed grass, good/premium, large rounds brought $125 to $175. 

Boxed beef closed higher with solid demand for fairly light offerings.  Choice closed $.77 higher at $263.26 and Select closed $2.58 higher at $234.49.  The Choice/Select spread is $28.77. Estimated cattle slaughter was 124,000 head – up 2,000 on the week and 4,000 on the year.  Saturday’s estimated kill is 32,000 head – down 10,000 on the week and 16,000 on the year. 

Lean hog futures ended the day higher, on oversold signals with additional support from sharply higher pork values during the session.  December lean hogs closed $.97 higher at $86.10 and February lean hogs closed $.70 higher at $88.85. 

Cash hogs closed sharply lower with a light negotiated run.  While demand has been strong for US pork on the global market and domestically, there are concerns long-term demand could suffer from a weakening global economy and could result in much lower prices.  Processors have been in a pattern recently where there have been a couple of days that have seen huge negotiated runs at sharply higher prices, and then business backs off and prices drop.  The industry continues to monitor the availability of market-ready hogs. Barrows and gilts at the National Daily Direct closed $1.15 lower with a base range of $85 to $98 with a weighted average of $90.54; the Iowa/Minnesota and the Western Corn Belt both closed $6.13 lower with a weighted average of $92.52; the Eastern Corn Belt had no comparison but a weighted average of $92.03.

According to the USDA’s Weekly Feeder Pig Report early-weaned pigs and all feeder pigs were $2 to $3 per head higher.  Demand was good on moderate offerings.  The Total Composite Cash Range for early-weaned pigs was $22 to $42 with a weighted average of $32.92 and the Total Composite Formula range for early-weaned pigs was $32.52 to $53.  The weighted average for all early-weaned pigs was $36.57 and the weighted average for all feeder pigs was $53.99. 

Butcher hog prices at the Midwest cash markets are steady at $58. At Illinois, slaughter sow prices were steady with light demand for moderate offerings at $59 to 471.  Barrows and gilts were steady with moderate demand for moderate offerings at $58 to $68.  Boars ranged from 430 to $35 and $9 to $19. 

Pork values closed higher, up $2.88 at $101.34.  Bellies closed $19.72 higher.  Picnics were also higher.  Hams, loins, and ribs were weak to lower. Estimated hog slaughter was 487,000 head – up 9,000 on the week and up 15,000 on the year. Saturday’s estimated kill is 122,000 head – down 23,000 on the week and 34,000 on the year. 

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