Cattle futures mostly lower on drop in boxed beef

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Cattle futures mostly lower on drop in boxed beef

Chicago Mercantile Exchange live cattle futures were mostly lower on spread trade and the midday drop in boxed beef, which followed a sharply lower close Wednesday. The USDA says last week’s beef export sales were a marketing year low, with Japan and Taiwan the biggest weekly buyers. June was up $.25 at $94.12 and Select was down $1.42 at $97.

Feeder cattle were sharply lower on that midday drop in boxed beef. May was $1.50 lower at $123.80 and August was down $2.02 at $131.05.

Direct cash cattle markets were at a standstill. Asking prices were $115 to $120 live and $185+ dressed with very light packer inquiry as buyers keep an eye on the wide swings in prices this week against signs wholesale demand might have topped out for now. The trade that has been reported this week has been light with very wide-ranging prices. Live sales in the south have ranged from $100 to $115 with dressed business in the north at $158 to $185. Some business is still likely left to be done to wrap up for the week, the questions are how much needs to be done and where will it be done. Overall, business continues to be constrained by lighter processing schedules caused by coronavirus.

Boxed beef closed mixed with light to moderate movement. Choice was down a record $15.07 at $450.92 and Select was up $.16 at $437.40. The estimated cattle slaughter of 92,000 head was up 6,000 on the week but down 30,000 on the year.

At midsession for the Winter Livestock Auction feeder cattle sale in Kansas, compared to the previous week, feeder heifers were mostly $2 to $4 lower, with 750 to 850-pound heifers down $6 to $8. There weren’t enough comparable weights for feeder steers to make an accurate trend. 84% of the offering were heifers and 99% of the run weighed more than 600 pounds. Medium and Large 1 feeder steers weighing 900 to 1,000 pounds ranged from $108 to $112.50 and Large 1 steers weighing 1,000 to 1,100 pounds brought $98.50 to $105.25. Medium and Large 1 feeder heifers weighing 700 to 800 pounds sold at $110.25 to $123.50 and 800 to 900-pound heifers were reported at $103 to $111.85.

Lean hog futures were mixed on spread adjustments, the bearish week for the export numbers, and the positive cash and wholesale fundamentals during the session. June was $.87 higher at $58.75 and July was $.32 lower at $58.80.

Cash hog business closed steady to firm with solid closing negotiated numbers at the major direct markets. As many plants come back online from COVID-19 related shutdowns, buyers continue to monitor the availability of processing space to handle the ample market ready numbers, while also keeping an eye on wholesale demand. The slaughter numbers have passed last week’s levels by a solid margin but remain well below year ago levels. Pork export sales were down sharply on the week, with a big cancellation by China. Beijing did pick up 6,100 tons, but also canceled on 18,500 tons, possibly a function of new trade tensions between the U.S. and China.

National direct barrows and gilts were $.18 higher at $33.50 to $38 with a weighted average of $37.05. Iowa/Southern Minnesota and the Western Corn Belt had no recent comparison, with a weighted average of $36.41. The five-day rolling averages are $36.90 for Iowa/Southern Minnesota and $36.88 for the Western Corn Belt. Butcher hogs at the Midwest cash markets were steady at $20. Illinois direct sows were steady at $7 to $20 with moderate to good demand for moderate offerings. Barrows and gilts were steady at $16 to $20 on moderate demand for heavy offerings. Boars ranged from $1 to $5.

Pork closed $3.42 lower at $113.79. Bellies dropped $26.10, with loins sharply lower and picnics down modestly. Ribs were $10.35 higher, butts gained $9.52, and hams were up modestly. The estimated hog slaughter of 372,000 head was up 43,000 on the week but down 90,000 on the year. Wednesday’s hog slaughter was revised to 379,000 head, up 6,000 from the initial projection.

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