Cattle futures follow Dow higher, ignore direct cash
Chicago Mercantile Exchange live cattle futures were supported by an oversold bounce following Tuesday’s decline and a rally in the Dow Jones Industrial Average, shrugging off light lower than a week ago direct trade and mixed, delayed, midday boxed beef. April was $1.17 higher at $111.27 and June was up $1.15 at $104.52.
Feeder cattle were higher on the same factors as the live pit. March was up $1.32 at $134.85 and April was $1.77 higher at $135.55.
Direct cash cattle business was light. Trade was reported at $113 on the live basis in Kansas and Texas, down $2 from the previous week’s weighted average. There were bids at $113 live in Nebraska with asking prices still hard to come by and widespread trade waiting until Thursday or Friday. There are a lot of questions about this week’s trade following last week’s drop and continues into other feeding areas, it’s not going to be a great couple of weeks for some producers, especially with the recent bounce in corn futures. On the global side of the ledger, exports will continue to be watched closely because of the demand concerns created by the spread of coronavirus. The weekly numbers are out Thursday morning. The Fed Cattle Exchange offering was 566 head, with no sales reported.
Boxed beef closed mixed on light to moderate demand for moderate offerings. Choice was up $.20 at $206.82 and Select was down $1.19 at $201.51. The estimated cattle slaughter of 122,000 head was down 1,000 on the week but up 7,000 on the year.
At the Winter Livestock feeder cattle sale in Kansas, compared to the previous week, there was a limited test but a higher undertone noted on steers and heifers were steady to $2 lower when using comparable weights. The USDA says demand was good to very good with mostly average quality. Medium and Large 1 feeder steers weighing 600 to 700 pounds sold at $142.50 to $156 and 800 to 900-pound steers were reported at $122 to $135.60. Medium and Large 1 feeder heifers weighing 600 to 700 pounds brought $127 to $135.10 and 700 to 800-pound heifers were reported at $123.50 to $126.50.
Lean hog futures were higher on short covering ahead of the USDA’s weekly export sales numbers and the steady to higher cash during the session. April was up $.75 at $64.30 and June was $.75 higher at $78.82.
Cash hogs were steady to higher with huge closing negotiated sales at the major direct markets. Buyers are trying to keep chain speed at a high level, while also remaining wary about the amount of pork on the market and waiting for China to issue tariff waivers. Even if Beijing does issue tariff waivers this week, that won’t show up until next week’s USDA export sales report. Coronavirus is reportedly slowing down in China, but it’s still spreading in other parts of the world, also potentially impacting demand. The average Iowa/Southern Minnesota barrow and gilt weight for the week of February 29th was 286.3 pounds, up 0.7 on the week and 1.2 pounds on the year.
Pork closed $.31 lower at $65.74. Hams dropped $4.38. The other primal cuts were firm to sharply higher, including a $2.04 gain in bellies. The estimated hog slaughter of 495,000 head was unchanged on the week and up 20,000 on the year.
National direct barrows and gilts closed $.60 higher at $45 to $53 with a weighted average of $50.60, while Iowa/Southern Minnesota was up $1.17 at $51.14 and the Western Corn Belt was $1.14 higher at $51.10. Butcher hogs at the Midwest cash markets were steady to $4 higher at $34 to $40. Illinois direct sows were steady at $19 to $28 with good demand for heavy offerings. Barrows and gilts were steady at $27 to $35 on moderate demand and offerings. Boars ranged from $5 to $18.
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