Hog futures drop as cash prices continue to slide
At the Chicago Mercantile Exchange, live cattle futures ended the day mostly higher on spread trade with support from the week’s stronger cash trade. Feeder cattle futures are mixed on spread trade. June live cattle closed $.67 higher at $101.47 and August live cattle closed $.45 higher at $101.17. August feeder cattle closed $1.47 higher at $135.50 and September feeder cattle closed $1.17 higher at $136.25.
A light to moderate scattered direct cash cattle trade developed in several areas on Thursday. Live deals ranged from $115 to $120 and dressed business at $190. There’s been a light to moderate trade each day this week, all with wide price swings. Earlier this week live deals in the South had a full range of $110 to $120 and dressed business in the North ranged from $174 to $190. Asking prices for cattle left on showlists are around $120 to $125 live in the South and $190 plus, dressed in the North.
At the OKC West Livestock Auction in Oklahoma, compared to last week feeder steers were $2 to $6 higher with most advances being seen on heavier weight cattle. Feeder heifers were $2 to $4 higher. The USDA says demand was good to very good and the quality was average to attractive. Receipts were about half of what they were last week, but up significantly on the week. Feeder supply included 62 percent steers and 84 percent of the offering was over 600 pounds. Medium and Large 1 feeder steers 754 to 796 pounds brought $124.50 to $131 and feeder steers 850 to 898 pounds brought $116 to $121.50. Medium and Large 1 feeder heifers 750 to 793 pounds brought $113.75 to $118 and feeder heifers 808 to 898 pounds brought $107 to $110.50.
Boxed beef closed sharply lower on light demand for heavy offerings. Choice closed $8.21 lower at $369.56 and Select closed $6.11 lower at $344.09. Estimated cattle slaughter is 110,000 head – up 7,000 on the week, but still down 11,000 on the year.
Lean hog futures ended the day sharply lower despite stronger wholesale values at midday, pressured by the ongoing slide in the cash trade and concerns about the long-term supply and demand picture. June lean hogs closed $3.25 lower at $56.92 and July lean hogs closed $3.65 lower at $55.65.
Cash hogs ended the day weak to lower with strong negotiated purchases. Slaughter capacity continues to creep closer to pre-COVID-19 levels, but it isn’t fully recovered yet. At the same time, supplies of market-ready hogs are more than ample. And while some pressure is being lifted from the supply chain and processors are getting through some of the backlog of hogs, it isn’t going to happen overnight. There are a couple of bright spots on the demand front. Grilling season is officially underway and there’s hope consumers will turn to pork and that will help to provide some price support. The global demand picture still presents some opportunities for the US pork industry as supplies of pork worldwide are short.
Barrows and gilts at the National Daily Direct closed $.37 lower with a base range of $25 to $39 for a weighted average of $37.45; the Iowa/Minnesota closed $1.50 lower for a weighted average of $37.75; the Western Corn Belt closed $1.32 lower for a weighted average of $37.98. The Eastern Corn Belt was not reported due to confidentiality.
Butcher hog prices at the Midwest cash markets are steady at $20. At Illinois, slaughter sow prices were steady with moderate demand for moderate to heavy offerings at $7 to $20. Barrow and gilt prices were steady with moderate demand for heavy offerings at $16 to $20. Boars range from $1 to $5.
Pork values closed firm – up $.64 at $89.46. Hams closed sharply higher – up $22. However, butts dropped $30 on Thursday, ribs closed more than $14 lower. Bellies were higher and loins and picnics were lower. Estimated hog slaughter is 422,000 head – up 24,000 on the week, but still down 47,000 on the year. Wednesday’s hog slaughter has been revised to 421,000 head.