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Feeder cattle close higher on lower corn
Feedlot country was quiet on Tuesday afternoon with just a few scattered bids of 112.00 in Kansas, and 180.00 to 183.00 in Nebraska. For the most part buyers are sitting on their hands, waiting until Thursday or later before securing short term slaughter needs. On the other hand feedlots continue to be resolute in terms of asking prices of 117.00 plus in the South and 185.00 plus in the North. Spot August live cattle contracts closing 20 point’s higher, preserving Monday’s rally and maintain a historically weak basis. The slaughter totaled 127,000 head, 1,000 below last week, and 3,000 smaller than a year ago.
Boxed beef cutout values were weak on choice and firm on select on light to moderate demand. Choice boxed beef was down .53 at 178.24, and select was up .66 at 171.35.
Live cattle contracts on the Chicago Mercantile Exchange settled 20 higher to 60points lower. Most contracts spent most of the session on both sides of unchanged. The sharp losses in the corn market helps to curb production costs, but at the same time limited expected long term beef market reductions due to the lower feed prices. The general pressure in outside markets also weighed on futures. August settled .20 higher at 118.80, and October was down .17 at 123.32.
Feeder cattle ended the session 202 to 275 points higher primarily due to sharply lower corn futures contracts. The volatility in the feeder market has eased over the last week as the limit down moves in the corn market have accounted for $1.00 to 2.00 per hundredweight moves in feeders compared to the limit-down movement in recent trading sessions. August settled 2.02 higher at 137.67, and September was up 2.62 at 140.35.
Feeder cattle receipts at the Joplin, Missouri Regional Stockyards totaled 3680 head on Monday. Compared to the previous week, steers weighing less than 800 lbs. were 4.00 to 7.00 lower, steers over 800 lbs., and heifers of all weights were steady to 3.00 lower. The demand and supply was moderate. Triple digit temperatures and no rain continue to take its toll on pastures. Feeder steers medium and large 1 weighing 525 to 600 lbs. brought 130.00 to 145.00 per hundredweight, steers 675 to 700 lbs. ranged from 125.00 to 127.50. 5 to 6 weight heifers traded from 114.50 to 131, and 6 to 7 weight heifers brought 116.50 to 126.00.
Lean hogs settled 40 to 100 points lower. Despite holding mixed price levels through much of the morning and the grain-market pressure keeping the trading range narrow, the sharply lower cash report seemed to erode any support in the nearby contracts. The pressure in the stock market may continue to add concerns that the economy still remains weak and limit the ability for pork prices to move higher over the near term. August lean hogs settled .40 lower at 92.92, and October was down .82 at 78.02.
Barrows and gilts in the Iowa/Minnesota direct trade closed 1.35 lower with a weighted average of 93.95 on a carcass basis, the West was down 1.36 at 93.70, and the East was .35 lower at 83.89. Missouri direct base carcass meat price closed steady to 1.00 lower from 82.00 to 87.00. Terminal hogs trended steady to 1.00 higher from 55.00 to 63.00.
Pork trading was light to moderate, with light to moderate demand and offerings. Loins and hams were higher and the pork carcass cutout value was up 1.57 at 92.52.
Some traditional importers of U.S. corn may at some point decide that it makes more economic sense to bypass the expensive feed and go right to the discounted finished product of pork, beef, and chicken. Bad news for U.S. corn exporters could be good news for U.S. meat exporters, according to DTN.
Tuesday’s hog kill was estimated at 402,000 head, 4,000 greater than last week, but 1,000 less than last year.
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