Market News

Increased production concerns pressure lean hog futures

At the Chicago Mercantile Exchange, cattle futures ended the day mostly lower on technical selling and last week’s disappointing cash business.  The trade is concerned about the additional beef production from higher slaughter numbers and increased weights.  However, today’s lower move in corn helped to limit the losses in feeder cattle.  December live cattle closed $.40 lower at $115.17 and February live cattle closed $.57 lower at $117.72.  January feeder cattle closed $.22 higher at $145.45 and March feeder cattle were unchanged at $143.32.

Direct cash cattle trade is quiet.  New showlists appear to be mixed – somewhat higher in Colorado, higher in Kansas, but lower in Nebraska at Texas.  Bids and asking prices are slow to develop and significant trade volume isn’t likely to be seen until the latter part of the week.

Boxed beef closed weak on light to moderate demand and offerings.  Select and Choice rib and round cuts were steady to weak while chuck and loin cuts were steady to firm.  Choice ended the day $.06 lower at $205.53 and Select closed $.31 lower at $185.66.  The Choice/Select spread ended at $19.87.

At the Joplin Regional Stockyards in Missouri, steer calves were steady to $5.00 higher, with instances of $8.00 to $10.00 higher and yearling steers were steady.  Heifer calves were steady and yearling heifers were steady to $2.00 lower.  The USDA says demand was moderate to good for a moderate supply.  Feeder supply included 53 percent steers and 42 percent of the offering was over 600 pounds.  Feeder steers, Medium and Large 1’s 500 to 600 pounds were $160.00 to $182.50 and Medium and Large 1’s 600 to 700 pounds were $151.00 to $165.00.  Feeder heifers, Medium and Large 1’s 500 to 600 pounds were $135.00 to $149.00 and Medium and Large 1’s 600 to 700 pounds were $151.00 to $165.00.

Estimated cattle slaughter is 120,000 head up 1,000 on the week and 6,000 on the year.

Lean hog futures fell again today on heavy selling and contracts premium to cash.  While wholesale values were up at midday, heavier weights and increased slaughter has traders worried about demand keeping pace with increased production.  December lean hogs closed $.07 lower at $63.60 and February lean hogs closed $1.82 lower at $67.02.

Cash hogs ended the day steady to lower.  The trade is watching the availability of market-ready numbers.  Packers were aggressive last week and that is likely to continue, and demand has remained strong – both of which are supportive to prices.  However, heavier weights and production that is outpacing the increase in demand could pressure prices.

Barrows and gilts at the Iowa/Southern Minnesota closed $.49 lower with a range of $52.00 to $59.00 and a weighted average of $58.81; the Western Corn Belt closed $.29 lower with a range of $52.00 to $59.00 and a weighted average of $58.81; the Eastern Corn Belt was not reported due to confidentiality; and the National Daily Direct is $.07 lower with a range of $52.00 to $59.20 and a weighted average of $58.92.

Butcher hogs at the Midwest cash markets are steady at $36.00 to $42.00.

At the Interior Missouri Direct, barrows and gilts are steady at $50.00 to $53.00 on light to moderate supply and demand.  Sows are steady at $28.00 to $36.00.

At Illinois, slaughter sow prices are steady at $26.00 to $40.00 with moderate demand for moderate offerings.  Barrows and gilts are steady at $37.00 to $43.00 with moderate demand for moderate offerings.

Pork value closed sharply lower – down $2.01 at $81.69.     The primals were mostly lower including a more than $7.00 drop in the belly.

Estimated hog slaughter is 464,000 head – down 1,000 on the week and up 22,000 on the year.