Feeder cattle pressured by sharply higher corn futures

Market News

Feeder cattle pressured by sharply higher corn futures

At the Chicago Mercantile Exchange, live cattle closed mixed, mostly higher, ahead of widespread direct business and feeder cattle closed sharply lower, pressured by the days sharply higher move in corn.  February live cattle closed $.92 lower at $112.47 and April live cattle closed $.70 lower at $117.65.  January feeder cattle closed $2.77 lower at $133.22 and March feeder cattle closed $2.92 lower at $133.97.

A light direct cash cattle trade developed late in the afternoon on Tuesday.  Deals in Nebraska were at $173 to $174 dressed, $2 lower than last week’s averages.  Bids in other areas remain scarce. Asking prices are at $114 live in the South, while the North remained quiet.  More significant trade volume will likely develop Wednesday or later.

At the close, at the Joplin Regional Stockyards in Missouri, compared to last week steer and heifer calves were steady to $2 lower, except under 500 pounds, which were steady to firm. The USDA says supply and demand was moderate.  Receipts were down on the week and up on the year.  Feeder supply included 57 percent steers and 53 percent of the offering was over 600 pounds.  Medium and Large 1 feeder steers 600 to 649 pounds brought $140 to $149 and feeder steers 700 to 741 pounds brought $133 to $140.  Medium and Large 1 feeder heifers 500 to 548 pounds brought $127 to $140 and feeder heifers 704 to 747 pounds brought $122 to $127. 

Boxed beef closed higher to sharply higher on good demand for solid offerings.  Choice closed $1.45 higher at $209.14 and Select closed $2.35 higher at $198.09.  The Choice/Select spread closed at $11.05. Estimated cattle slaughter is 119,000 head – up 1,000 on the week and down 5,000 on the year.  Monday’s cattle slaughter has been revised to 116,000 head. 

Lean hog futures ended the day higher, supported by higher wholesale values during the session.  February lean hogs closed $.02 higher at $68.50 and April lean hogs closed $.57 higher at $72.52. 

Closing cash hogs were mixed with a solid negotiated run.  Processors have been pushing daily slaughter totals at or near record totals every day, which is a necessity as supplies of market-ready barrows and gilts are heavy.  The big daily slaughter runs are also helping to keep supply chains moving.  While that’s preventing more hogs from backing up in the production system, it’s also adding more pork to the market.  But, demand, both globally and domestically, face uncertainty and that’s creating additional pressure on prices.  Barrow and gilts at the National Daily Direct closed $.52 lower with a base range of $44 to $57 with a weighted average of $55; the Iowa/Minnesota closed $2.46 higher at $54.63; the Western Corn Belt closed $3.39 higher at $54.44.  The Eastern Corn Belt was not reported due to confidentiality. 

Butcher hog prices at the Midwest cash markets are steady at $39. At Illinois, slaughter sow prices were $1 higher with good demand for heavy offerings at $27 to $41.  Barrow and gilt prices were steady with good demand for moderate to heavy offerings at $31 to $39.  Boars ranged from $15 to $20. 

Pork values closed sharply lower – down $4.19 at $79.19.  Hams dropped more than $14 to finish the day.  Picnics, buts, and bellies were all sharply lower.  Ribs and loins closed higher. Estimated hog slaughter is 498,000 head – up 9,000 on the week and down 2,000 on the year.