Live cattle futures mostly lower waiting for cash business to develop

Market News

At the Chicago Mercantile Exchange, live cattle ended the day mostly lower on spread adjustments ahead of widespread direct cash business. Feeder cattle were mostly higher on position squaring ahead of Thursday’s Livestock Slaughter and Friday’s Cattle on Feed report. April live cattle closed $2.65 lower at $88.95 and June live cattle closed $.15 lower at $83.92. April feeder cattle closed $.57 higher at $118.47 and May feeder cattle closed $.07 lower at $116.67.

Another round of light direct cash cattle trade developed on Wednesday. There were a handful of deals reported across most feeding areas. Live deals in Kansas were at $100, live deals in Texas at $93 to 98. Dressed deals in Iowa and Nebraska range from $148 to $150. Asking price are at $105 to $108 live and $168 dressed. It looks like significant trade volume will be delayed until sometime Thursday or Friday.

At the Philip Livestock Auction in South Dakota, compared to two weeks ago feeder steers 600 to 900 pounds were steady and feeder heifers 600 to 700 pounds were steady. The USDA says demand was moderate for several long strings and packages of feeder steers and feeder heifers, all of which sold on a moderate market. Many of the steers came from backgrounding yards and carried moderate to moderate plus flesh. Receipts were up from two weeks ago. Feeder supply is 58 percent steers and 98 percent of the offering was over 600 pounds. Medium and Large 1 feeder steers 934 to 941 pounds brought $114.75 and feeder steers 963 to 978 pounds brought $112.25 to $113.25. Medium and Large 1 feeder heifers 617 to 629 pounds brought $138 to $141.50 and feeder heifers 859 to 895 pounds brought $110.

Boxed beef closed sharply higher on good demand for moderate offerings. Choice closed $15.90 higher at $275.75 and Select closed $12.20 higher at $261.02. The Choice/Select spread is $14.73.

Estimated cattle slaughter is 85,000 head – down 8,000 on the week and down 37,000 on the year.

Lean hog futures ended the day mixed on spread adjustments ahead of Thursday’s livestock slaughter report. There was also support from the day’s higher wholesale values. May lean hogs closed $2.95 at $47.22 and June lean hogs closed $.20 lower at $47.90.

Cash hogs closed higher with strong negotiated numbers. Packers bid up to move their desired numbers today. But overall, the market is pressured as plants are still slowing their chain speed and having to shutter as COVID-19 is impacting the labor force. The global protein picture remains a bright spot as China is expected to have tight supplies through the remainder of 2020. And as long as US pork production doesn’t see a prolonged disruption it is well positioned to meet the world’s pork and protein needs.

Barrows and gilts at the National Daily Direct closed $1.41 higher with a base range of $31 to $37 for an average of $34.24; the Iowa/Minnesota had no comparison but a weighted average of $36.07; the Western Corn Belt closed higher, up $2.08 with a weighted average of $36.24. The Eastern Corn Belt was not reported due to confidentiality.

Butcher hog prices at the Midwest cash market are steady at $24.

At Illinois, slaughter sow prices were weak with moderate to good demand for moderate to heavy offerings at $15 to $28. Barrow and gilt prices were weak with light demand for moderate offerings at $10 to $18. Boars ranged from $2 to $5.

Pork values closed sharply higher – up $3.03 at $72.98. Hams, butts, and bellies all were sharply higher. In fact, with Wednesday’s close, bellies are back over $1. Ribs were higher. Picnics and loins were weak to lower.

Estimated hog slaughter is 363,000 head – down 72,000 on the week and down 116,000 on the year.