Direct cattle business slow to develop
Chicago Mercantile Exchange live cattle futures were lower, pressured by profit taking and the lower midday boxed beef, with the week’s futures trade ending ahead of the start of widespread direct cash business. The trade is also monitoring the impact of tariffs on export demand. August was down $.47 at $104.55 and October was $.22 lower at $107.37.
Feeder cattle were mixed on the lower midday beef, lower corn, and position squaring for direct cash trade. August was $.30 lower at $150.72 and September was $.10 higher at $151.07.
Direct cash cattle markets were generally very quiet. Aside from some very light dressed business earlier in the week, most of the major feeding areas stayed at a standstill, even through Friday afternoon. What business was reported was light, mainly at $109.50 on the live basis in Texas and Kansas, and $173 to $175 dressed in Nebraska and Iowa. Buyers will apparently go into the week short bought and the showlist will probably be larger. Asking prices were $114+ live and $182+ dressed, with bids of $107 to $108 live and $171 to $175 dressed. The USDA Thursday increased its 2018 beef production estimate, expecting a higher rate of cow slaughter, but lowered the 2019 outlook, expecting a slower kill rate.
Boxed beef closed lower on light to moderate demand and offerings. Choice was down $2.44 at $204.14 and Select was $.64 lower at $196.37. The estimated cattle slaughter of 118,000 head was down 1,000 on the week, but up 3,000 on the year.
At the Burwell Livestock Market in Nebraska Friday, there was no test given because of the lack of an adequate recent comparison. The USDA says demand was moderate to good, with a good crowd on hand. All of the offering were feeders, 61% of the slate were heifers, and nearly 96% of the run weighed more than 600 pounds. Medium and Large 1 feeder steers averaging 830 pounds brought $152 and 930 to 960-pound steers ranged from $142.10 to $143.60. Medium and Large 1 feeder heifers averaging 817 pounds sold at $135.75 to $141.35 and 912-pound heifers were reported at $132.60.
The USDA reports that in Iowa, first and second cuttings of hay are available, and while the second cutting is normally cleaner than the first, recent hot, wet weather has limited alfalfa growth while encouraging the grasses and weeds. Premium large squares of alfalfa ranged from $300 to $350, with small squares at $220 to $375, while good large squares brought $150 to $185, with small squares at $185 to $225. Good large squares of grass sold at $120 to $170, with large rounds at $90 to $150 and small squares at $150 to $175. In Missouri, with just over 8% of the state in extreme drought conditions, the USDA says hay feeding is increasing and some producers are culling more cattle to stretch supplies. Supplies are tight, demand is good to very good, and hay prices are steady to sharply higher. Large rounds of supreme quality alfalfa were reported at $180 to $250, with premium at $160 to $200 and good quality at $100 to 120. Good quality mixed grass hay ranged from $100 to $200 with fair to good quality at $60 to $150. Good quality bromegrass was reported at $100 to $150. For Nebraska, alfalfa was unevenly steady, with drought and delivered forages and dehydrated pellets steady to $5 higher. The USDA says demand was moderate and recent rainfall in much of the state is preventing hay from being put up. The second cutting of alfalfa is underway in some areas. In Eastern and Central Nebraska, good large rounds of alfalfa were reported at $115 to $120, with fair to good large rounds at $90. Good large squares of new crop grass hay sold at $100, with good large rounds of old crop at $105 to $110. Premium small squares of premium ranged from $160 to $170. Standing alfalfa brought $100 per ton. 17% protein dehydrated alfalfa pellets came out at $240. The in the Platte Valley, good large rounds of alfalfa sold at $105 to $110, with some headed out of state as high as $125. Ground and delivered alfalfa was pegged at $130 to $140. 17% protein dehydrated alfalfa pellets brought $220. For Western Nebraska, premium large squares of alfalfa were reported at $150 with good large rounds and large squares each bringing $130. Ground and delivered alfalfa ranged from $150 to $185. 15% protein sun-cured alfalfa pellets sold at $215 to $230.
Lean hog futures were mixed on spread trade and short covering, with strong gains starting in the October contract, carrying through the far-off deferred months. Also, the session’s fundamentals were conflicting, with lower cash and higher midday pork, and traders continue to watch the effects of tariffs on U.S. exports. July was unchanged at $79.95 and August was down $.27 at $70.15.
Cash hogs were mixed, with generally light closing negotiated numbers for the major direct markets. It looks like buyers were largely able to move the needed numbers for the weekend and early next week ahead of Friday. Saturday’s kill is expected to be about 36,000 head, putting the weekly total at around 2.25 million, up about 3.5% on the year. The USDA raised its 2018 pork production projection Thursday, expecting the fast slaughter pace to continue through the end of the year, mostly based on the implications of the USDA’s most recent quarterly inventory report.
Pork closed $.31 higher at $83.82. Butts were firm, bellies were sharply higher, and hams jumped $3.35. Loins, picnics, and ribs were sharply lower. The estimated hog slaughter of 438,000 head was down 13,000 on the week, but up 32,000 on the year.
Iowa/Southern Minnesota direct barrows and gilts closed $.01 lower at $67 to $76 with a weighted average of $73.52, the Western Cornbelt was $.15 higher at $67 to $76 for an average of $73.36, and national direct business was down $.86 at $67 to $76 with an average of $74.19. Butcher hogs at the Midwest cash markets were $1 lower at $52 to $57. Illinois direct sows were $1 lower at $27 to $38 on light to moderate demand for moderate offerings. Barrows and gilts were weak at $44 to $54 on moderate demand and offerings. Boars ranged from $8 to $32.
The USDA reports early weaned pigs were $2 lower and all feeder pigs were $1 lower. Demand was light to moderate for moderate offerings. For early weaned pigs, the total composite formula range was $25.42 to $44, with an average of $33.76, and the total composite cash range was $10 to $20, with an average of $15.32, putting the weighted average for all early weaned pigs at $26.96. The total composite cash range on feeder pigs was $18 to $39 with an average of $31.52.
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