Hog futures supported by sharply higher cash prices
At the Chicago Mercantile Exchange, live cattle ended the day higher on follow-through buying and optimism about higher cash trade this week. Feeder cattle were higher on the same factors. Beef, along with pork is eligible for tariff waivers out of China. February live cattle closed $.60 higher at $121.42 and April live cattle closed $.27 higher at $120.60. March feeder cattle closed $.77 higher at $139.30 and April feeder cattle closed $.40 higher at $141.77.
Direct cash cattle trade is at a near standstill with bids and asking prices still not fully established. However, there have been a few scattered asking prices reported in parts of Texas at $122. We could see more develop throughout the day, but significant trade volume will likely be delayed until midweek or later.
At the Joplin Regional Stockyards, compared to last week, steers and heifers under 700 pounds were steady to $5 higher, over 700 pounds were $2 to $7 higher. The USDA says demand was good, supply was moderate to heavy. Flesh conditions were favorable to buyers, quality was good, and the trade was active. Receipts of 6,882 were up on the week and the year. Feeder supply included 56 percent steers and 44 percent of the offering was over 600 pounds. Medium and Large 1 feeder steers 551 to 597 pounds brought $155 to $175 and feeder steers 600 to 648 pounds brought $148 to $164. Medium and Large 1 feeder heifers 550 to 596 pounds brought $137 to $157 and feeder heifers 602 to 649 pounds brought $131 to $147.
Boxed beef closed lower to sharply lower on light demand and moderate offerings. Choice closed $1.13 lower at $206.13 and Select closed $2.45 lower at $203.73. The Choice/Select spread closed at $2.40. Estimated cattle slaughter is 123,000 head – up 1,000 on the week and up 7,000 on the year.
Lean hog futures ended the day higher on support from sharply higher cash and wholesale values and long-term demand optimism. Pork, along with beef, is now eligible for tariff waivers out of China. April lean hogs closed $1.20 higher at $65.50 and May lean hogs closed $.55 higher at $73.55.
Cash hogs closed higher with strong negotiated numbers. The market is stuck in a back and forth game watching the overall supply and demand situation. Today, demand optimism is the driver behind the cash hog market. However, in the short-term, China continues to battle the coronavirus, and the uncertainty about demand impact does limit price movement. Supplies remain more than ample and with heavier weights, increased production, and big kill numbers – there is more pork being added to the market. Livestock slaughter numbers come out on Thursday, and that’s not likely to be friendly to the supply picture. Barrows and gilts at the National Daily Direct closed $2.05 higher with a base range of $45 to $53 for a weighted average of $50.05; the Iowa/Minnesota closed $2.33 higher for a weighted average of $50.37; the Western Corn Belt closed $2.31 higher for a weighted average of $50.35; the Eastern Corn Belt had no comparison but closed with a weighted average of $49.60.
Butcher hog prices at the Midwest cash market are steady at $34 and $36.
At Illinois, slaughter sow prices were $1 to $3 higher with moderate to good demand for heavy offerings at $17 to $26. Barrow and gilt prices were steady with moderate demand for moderate offerings at $27 to $35. Boars range from $5 to $18.
Pork values closed higher – up $2.15 at $65.01. Hams closed sharply higher. Loins and bellies were also higher. Ribs were firm. Butts and picnics were weak to lower. Estimated hog slaughter is 494,000 head – down 2,000 on the week and up 18,000 on the year. Monday’s hog slaughter has been revised to 485,000 head.