Cattle country was in a state of shock on Tuesday afternoon following the implosion of live and feeder cattle futures. Most contracts closed over 200 points lower with December closing down the 300 point limit. Aggressive board selling was related to fundamental worries as well as technical bearishness. Given the collapse in futures it may take buyers and sellers several days to regroup and reposition. The slaughter totaled 128,000 head, 1,000 more than last week, but 2,000 below year ago.
Boxed beef cutout values were steady to weak on light to moderate demand and offerings. Choice boxed beef was down .01 at 192.68, and select was .87 lower at 181.86.
Chicago Mercantile Exchange Live cattle contracts settled sharply lower with triple digit losses in all contract months. Pressure developed through all contract months with liquidation seen by both commercial and noncommercial traders. The lack of support in the outside markets limited any additional buying activity from stepping back into the market early in the week. October settled 2.60 lower at 122.70, and December was down the 3.00 limit at 125.40.
Feeder cattle settled 57 to 275 lower. Feeder futures posted the moderate to sharp losses even though trade volume remained light through much of the session, with the focus on the triple digit losses in the live pit. September settled at 143.20 down .57, and October was 2.22 lower at 145.17.
Feeder cattle receipts at the Joplin Regional Stockyards on Monday totaled 5370 head. Compared to last week, steer and heifer calves were steady to 3.00 lower, yearlings were steady. Demand and supply was moderate. The weather has been beautiful, but new crop calves are at a health risk with the wide range in temperatures. Feeder steers, medium and large 1 weighing 665 lbs. brought 152.52 per hundredweight. 677 lb. heifers traded at an average of 133.15.
Lean hogs settled 22 to 85 points lower pressured by the weakness in outside markets. The recent firmness in pork fundamentals continues to limit the overall market pressure seen in the nearby lean hog contracts, as traders focused on the sharp losses in the cattle market and the pressure in the grains. October settled .22 lower at 76.27, and December was down .70 at 74.65.
There was slow market activity and light demand in the cash hog trade on Tuesday. Barrows and gilts in the Iowa/Minnesota direct trade closed 1.09 higher at 74.57 on a carcass basis, weighted average, the West was up 1.05 at 74.23, and the East ended .63 higher at 68.15. Missouri direct base carcass meat price was steady to 4.00 higher at 65.00. Terminal hogs ended 1.50 to 3.00 higher from 46.00 to 51.00.
Pork trading was moderate, with light to moderate demand and offerings. Pork carcass cutout value was up .46 at 78.80.
The Tuesday hog kill at 437,000 head was 2,000 more than last week, and 8,000 greater than last year. The slaughter remains large and is expected to reach around 2,345,000 head, down about 55,000 head from last week. Processing margins have shrunk a bit and packers may be unwilling to continue to pay higher prices for market hogs.