Livestock Futures Fluctuate as Market Dynamics Shift

The livestock futures market has experienced a mixed performance this week, with cattle and hog contracts seeing declines at the Chicago Mercantile Exchange. The article delves into the factors driving these movements, providing insights into the current state of the industry and the potential implications for producers and consumers alike.

Navigating the Ebb and Flow of Livestock Futures

Cattle Futures Retreat Ahead of Direct Trade

The live and feeder cattle futures contracts have seen a downward trend, with December live cattle closing $0.65 lower at $187.22 and February live cattle closing $0.77 lower at $188.17. Similarly, November feeder cattle closed $1.62 lower at $248.67, and January feeder cattle closed $1.57 lower at $245.87. This decline in cattle futures prices is occurring ahead of the week's direct cash cattle trade, which has been relatively quiet so far, with a lone bid of $187 live in Iowa. Producers and market participants are anticipating more significant trade volume to materialize later in the week, potentially influencing the direction of futures prices.The OKC West Livestock Auction in Oklahoma reported steady to higher prices for feeder steers and heifers, with demand described as good. Weaned steer calves under 450 pounds saw a $5 to $8 increase, while the remainder of the offering and heifers were fully steady. The auction saw an increase in receipts compared to the previous week and year, with feeder supply comprising 70% steers and 80% of the offering being over 600 pounds. Medium and Large 1 feeder steers between 702 and 797 pounds brought $251 to $260.50, while feeder heifers in the 604 to 795 pound range sold for $225 to $263.In the boxed beef market, Choice-grade beef closed $1.34 higher at $308.18, while Select-grade beef closed $0.02 higher at $288.63, resulting in a Choice-Select spread of $19.55. Estimated cattle slaughter for the week was 125,000 head, down 1,000 from the previous week and roughly even with the year-ago level.

Hog Futures Pressured by Overbought Signals

The lean hog futures market also experienced declines, with the December contract closing $1.60 lower at $75.57 and the February contract closing $1.32 lower at $79.45. This downward movement was attributed to overbought signals in the market.In the cash hog market, prices have been lower, with a light negotiated run. Processors have not been moving large numbers, and supplies of market-ready hogs are ample. Hog weights have increased by more than half a pound this week to 284.8 pounds, nearly 3 pounds heavier than the year-ago level. While global demand for U.S. pork has been strong, there are long-term concerns about domestic demand that are weighing on the market.At the National Daily Direct, barrows and gilts closed $1.32 lower, with a base range of $69 to $76.50 and a weighted average of $75.16. In the Iowa/Minnesota region, the weighted average price closed $2.22 lower at $74.30, while the Western Corn Belt saw a $1.27 decline to a weighted average of $75.23. Prices at the Eastern Corn Belt were not reported due to confidentiality.In the Midwest cash markets, butcher hog prices remained steady at $60. At Illinois, slaughter sow prices were steady with moderate demand, ranging from $56 to $68, while barrows and gilts were also steady with moderate demand, priced between $45 and $55. Boar prices ranged from $20 to $30 and $15 to $25.Pork values closed higher, up $0.39 at $95.20. Bellies saw a significant jump of more than $7 on Wednesday, while ribs were also higher. However, picnics, butts, loins, and hams were all lower. Estimated hog slaughter for the week was 486,000 head, even with the previous week and down about 3,000 from the year-ago level.