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Feb. cattle closed moderately higher on the day and saw the highest close since Dec. 19, the CME said. February hogs pushed up to the highest level since Nov. 29 but closed lower on the day.
The Dec. 1 Cattle on Feed figure was 93.97 percent of a year ago, which was in the upper end of trade expectations, Brugler Marketing said. That is bullish, requiring beef prices to trade at higher levels in order to slow consumption to fit the new supply reality. However, futures are already trading at or near record high prices for 2013 contracts, and have built in a price assumption that is 5% or more above the all time highs at the retail meat counter. It remains to be seen whether the grocery chains will (or can) push that large of an increase through to consumers, or will be forced to switch to pork and poultry features. This morning, retail boxes are solidly higher with choice up $1.58 and select up $2.10. With that gain, choice is still more than $5 below the all time high. Feeder cattle are also seeing strong gains this morning with January futures more than $1.30 higher, and more strength out into March and April.
CATTLE: The market pushed slightly higher with quiet trade early today as weakness in the stock market, 25 new deliveries and end of year liquidation selling were apparently offset by weather, the CME said. Cold and some snowy weather for parts of Oklahoma and the northern plains has helped to provide some support as traders see the potential for declining weights and increased death loss as potentially supportive. The premium to the current cash market remains a concern and traders will be monitoring beef prices closely to see if cash markets will be bid higher into mid-January to rationalize the premium. Boxed-beef cut-out values for choice beef at mid-session came in at $194.67, up $1.58 from Friday and compared with $194.86 last week at this time. Select beef at mid-session came in at $179.89, up $2.10 from Friday and compared with $174.45 last week at this time. The rally in the select beef opens the door for higher trade in the cash market ahead. Slaughter came in well below trade expectations at 121,000 head which is likely due to the weather.
Tekamah, Online Higher Education NE
HOGS: The market pushed higher with choppy trade early but the buying eased and so did the market late in the day with much of the losses in the last half hour of trade, the CME said. Ideas that the sharp rally of the past five trading session has already taken into account the tightening supply outlook ahead helped to limit the buying. The market found support from heavy snow totals in parts of Indiana and talk of colder weather in the west which could slow marketings and limit weight gains over the near-term. Traders see to total pig supply on December first near 99.3% of last year for the report Friday with some showing a decline of more than 1% and a one analyst showing aClosing Livestock Commentary live stock market prices supply higher than last year. Weekly average weights for Iowa/Minnesota for the week ending December 22nd came in at 273.6 pounds which was unchanged from the previous week and down from 275.7 pounds last year. Cash hogs were mostly steady today as wind and snow in some areas reduced marketings but demand is also pinched due to the slower slaughter schedule this week. Slaughter came in at 425,000 head which was below trade expectations; likely due to the weather.
Midwest Producer
midwestproducer.com
The USDA put pork in cold storage as of November 30 at 558.035 million pounds or 13 percent higher than a year ago but 8 percent smaller than last month, Brugler Marketing said. The weekly slaughter last week was estimated at 2.348 million head, up 44,000 from the previous week as packers tried to partially offset downtime for the first part of this week. With USDA closed on Monday and Tuesday there was no updated official data on how many plants were open on Monday. Nearly all were closed on Tuesday. USDA is back to a normal operating schedule this morning. Weighted average prices for cash hogs this morning were $3.60 higher in the WCB,Education Information. $4.18 higher in the IA/MN marketing area and $1.50 higher in the ECB.
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FEEDER CATTLE: Although most of the session livestock markets were directionless through the morning, midday support developed in the feeder cattle futures with all nearby contracts holding gains over $1 per cwt, analysts at DEN said. There is not expected to be a lot of trade in the feeder cattle markets, but the pressure in the grain markets seems to have allowed buyer interest to run the market higher for now. The challenge with the light volume is that any early gains can just as easily evaporate.
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