Demand optimism supports hog futures

Market News

Demand optimism supports hog futures

At the Chicago Mercantile Exchange, live and feeder cattle closed lower ahead of the week’s direct cash business.  Feeder cattle were under additional pressure from the day’s higher move in corn.  October live cattle closed $.47 at $109.70 and December live cattle closed $.47 lower at $112.62.  October feeder cattle closed $.45 lower at $138.05 and November feeder cattle closed $1.42 lower at $136.45. 

Scattered direct cash cattle trade took place on Thursday.  Live deals in Kansas are at $108, $1 higher than last week’s weighted averages.  Dressed business in Nebraska was at $168 to $169, also higher than last week’s weighted average basis.  Asking prices are holding firm around $110 live in the South and $173 to $175 dressed in the North.  It looks like the bulk of the week’s business is going to hold out until Friday. 

At the Mitchell Livestock Auction in South Dakota, compared to last week steers up to 700 pounds had a lower undertone, steers 700 to 900 pounds had a higher undertone noted.  Steers 900 to 1000 pounds were $4 to $5 higher.  Heifers 800 to 900 pounds were steady to $3 higher.  There were many load lots in the day’s offering and demand was good.  Feeder supply included 57 percent steers and 92 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 704 to 740 pounds brought $153.35 to $157 and feeder steers 925 to 931 pounds brought $137.85 to $143.75.  Medium and Large 1 feeder heifers 825 to 842 pounds brought $134 to $139.50 and feeder heifers 851 to 861 pounds brought $130.75 to $133. 

Boxed beef closed lower to sharply lower on light demand for moderate offerings.  Choice is $.88 lower at $216 and Select is $2.48 lower at $203.10.  The Choice/Select spread is $12.90.   Estimated cattle slaughter is 117,000 head – down 3,000 on the week and steady on the year.

Lean hog futures ended the day higher, supported by the strong weekly export sales report from the USDA.  Last week’s sales were up 52 percent from the previous week, with China the largest purchaser, followed by Mexico.  The shift in the global pork market, resulting from the banning of imports of pork from Germany following several confirmed cases of African swine fever in the country’s wild boar population, continues to show promise for US pork demand.  October lean hogs closed $.47 higher at $77.35 and December lean hogs closed $2.27 higher at $66.85. 

Cash hogs closed sharply higher with a solid negotiated run.  Packers bid up to move their desired numbers today.  The industry remains optimistic demand for US pork will see a big boost on the global market, which provides some price support.  However, the more than ample supplies of ready barrows and gilts does weigh heavily on the market.  Processors are pushing daily slaughter totals higher.  While that’s helping to alleviate some of the backlog in the production system, it’s also adding more pork to an already saturated market.  Barrows and gilts at the National Daily Direct closed $1.37 higher with a base range of $60 to $69 for a weighted average of $65.11; the Iowa/Minnesota closed $3.57 higher for a weighted average of $66.47; the Western Corn Belt closed $3.33 higher with a weighted average of $66.23.  The Eastern Corn Belt was not reported due to confidentiality. 

Butcher hog prices at the Midwest cash markets are steady at $40. At Illinois, slaughter sow prices were steady with good demand for moderate offerings at $15 to $28.  Barrow and gilt prices were firm with good demand for moderate to heavy offerings at $39 to $44.  Boars ranged $1 to $3. 

Pork values closed steady – up $.18 at $95.36.  Hams were sharply lower, while the rest of the primals were higher to sharply higher.  Estimated hog slaughter is 489,000 head – up 4,000 on the week and unchanged from a year ago.