Hog futures higher on demand expectations
At the Chicago Mercantile Exchange, live cattle ended the day mixed, mostly higher on spread adjustments ahead of Friday’s On Feed numbers and waiting for cash trade to develop. Feeder cattle were higher on follow-through buying with added support from the day’s weaker move in corn. February live cattle closed $.12 lower at $121.30 and April live cattle closed $.20 higher at $120.80. March feeder cattle closed $1.47 higher at $140.77 and April feeder cattle closed $1.25 higher at $143.02.
A light live direct cash cattle trade has been reported in parts of Texas at $120, that’s $1 higher than last week’s weighted averages. The rest of cattle country remains pretty quiet – there are some other live bids at $119 to $120. Asking prices are at $122 live in the South and $195 to $197 dressed in the North. Look for significant trade volume to develop over the balance of the week.
At the Kingsville Livestock Auction in Missouri, compared to last week steers and heifers were mostly steady to $5 higher, steer calves 400 to 450 pounds were $10 to $15 higher and 500 to 550-pound steers were $5 to $8 higher. The USDA says demand was very good for grazing cattle and moderate to good for yearlings. Supply was heavy. Receipt of 3,731 head were up on the week. Feeder supply included 54 percent steers and 59 percent of the offering was over 600 pounds. Medium and Large 1 feeder steers 601 to 637 pounds brought $161.50 to $171.50 and feeder steers 655 to 699 pounds brought $150.50 to $158.50. Medium and Large 1 feeder heifers 602 to 648 pounds brought $135 to $146.25 and feeder heifers 704 to 733 pounds brought $128.85 to $136.75.
Boxed beef closed weak to lower on light to moderate demand and moderate to heavy offerings. Choice closed $.56 lower at $205.57 and Select closed $1.97 lower at $201.76. The Choice/Select spread is $3.81. Estimated cattle slaughter is 122,000 head – up 2,000 on the week and 13,000 on the year.
Lean hog futures ended the day higher on follow-through buying and long-term demand optimism. April lean hogs closed $2.07 higher at $67.57 and May lean hogs closed $1.75 higher at $75.30.
Cash hogs closed mixed with solid negotiated purchase numbers. The market continues to monitor the supply and demand situation. Concerns linger that the coronavirus outbreak in China will impact the short-term demand situation, however, long-term optimism that demand for US pork will see significant boosts on the global market remains. And that’s helping to keep prices supported even when supplies of pork are growing. Thursday’s Livestock Slaughter report from the USDA isn’t expected to be friendly. And all eyes will be on the latest Export Sales report from the USDA that comes out on Thursday morning. Hog weights dropped .2 pounds from last week to 285.3 pounds, that’s down .9 pounds from last year. Barrows and gilts at the National Daily Direct closed $.19 higher with a base range of $45 to $52 for a weighted average of $49.83; the Iowa/Minnesota closed $.55 lower for a weighted average of $49.21; the Western Corn Belt closed $.47 lower for a weighted average of $49.29; the Eastern Corn Belt closed $1.03 higher for a weighted average of $50.48.
Butcher hogs at the Midwest cash markets are steady in Dorchester, Wisconsin and Garnavillo, Iowa at $36 and $34 and lower in Red Oak, Iowa at $33. At Illinois, slaughter sow prices were steady with moderate to good demand for heavy offerings at $17 to $26. Barrow and gilt prices were firm with moderate demand for moderate offerings at $27 to $35.
Pork values ended the day $1 lower at $64.01. Hams and bellies were lower. Loins were weak. Butts, picnics, and ribs were firm. Estimated hog slaughter is 492,000 head – even on the week and up 27,000 on the year.