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Live Cattle Futures: A Mixed Outlook Amid Direct Business Development

At the Chicago Mercantile Exchange, the live cattle market showcased a mixed performance, with feeder cattle experiencing a decline as traders pay close attention to the development of direct cash business this week. Specifically, February live cattle futures concluded at $197.05, reflecting a gain of $0.30. Conversely, April live cattle saw a modest drop of $0.17, finishing at $197.32. On the other hand, March feeder cattle closed $0.80 lower at $267.25, while April feeders faced a significant decline, closing down by $1.65 at $266.57.

Developments in the Direct Cash Cattle Trade

Later in the week, direct cash trade activity was noted late Tuesday, marking a pivotal moment for insights into market valuation. In parts of the Southern U.S., live deals were reported at $201, which mirrored the pricing levels seen the previous week, indicating some stability in the market. However, activity in the Northern regions appeared rather sluggish, suggesting that further trades may be forthcoming as the week progresses.

Insights from the Joplin Regional Stockyards

Turning to the Joplin Regional Stockyards in Missouri, feeder steer prices remained relatively stable, except for those weighing under 475 pounds, which experienced a reduction of $12. Notably, feeder heifers exhibited a range of selling prices, from $2 lower to as much as $8 higher, with those under 450 pounds commanding prices up to $25 higher. According to the USDA, the supply conditions were robust with very strong demand seen across various categories. The week-on-week and year-on-year receipts were reported as being substantially higher, suggesting consistent market interest.

In detail, for Medium and Large 1 feeder steers weighing between 600 to 648 pounds, prices fluctuated between $306 and $332. For slightly heavier feeder steers in the 752 to 797-pound range, pricing was noted between $264 and $279. Looking at feeder heifer pricing, 603 to 649-pound heifers were traded at $267 to $288, while those weighing 702 to 748 pounds brought prices ranging from $250 to $264.

Boxed Beef Market Trends

The boxed beef market concluded with mixed results amid light to moderate demand for solid offerings. The Choice beef category saw a decline of $1.11, finishing at $332.05, whereas Select beef gained marginally, closing at $319.55, marking a rise of $0.11. This resulted in a Choice/Select spread of $12.50. Estimated cattle slaughter returned figures of 124,000 head, reflecting a decrease of 1,000 head both from the previous week and year.

Lean Hogs Market Overview

In the lean hog futures market, prices ended the day mixed, largely influenced by spread trading dynamics. Cash business remained steady to firm, despite midday pork values showing some decline. Specifically, February lean hogs closed slightly higher at $81.20, experiencing a gain of $0.07. In contrast, April lean hogs faced a sizeable decrease, closing at $86.70, down by $1.62.

Cash Hogs Performance and Geopolitical Implications

Cash hog prices closed higher although the negotiated runs were relatively light. Processors managed to acquire the necessary numbers without aggressive procurement strategies. Noteworthy is the strong global demand for U.S. pork, which provided some price support in the market. However, looming concerns remain regarding potential tariffs of 25% on imports from Canada and Mexico, an initiative proposed by the Trump administration due to be enforced by February 1, 2025. This represents a significant shift from their previous stance. Such changes pose the risk of disrupting demand and adversely affecting prices.

In the National Daily Direct report, barrows and gilts were noted at $0.58 higher, with a base range of $73 to $81, culminating in a weighted average of $79.75. In comparison, the Iowa/Minnesota region closed $0.61 lower with an average of $79.78, while the Western Corn Belt saw a decrease of $0.55, averaging at $79.84. The Eastern Corn Belt’s prices were not disclosed due to confidentiality issues.

Midwestern Cash Markets Overview

In the Midwest cash markets, butcher hog prices held steady at $55 at midday. In Illinois, slaughter sow prices demonstrated stability with moderate demand observed across moderate offerings, ranging from $37 to $49. Meanwhile, barrows and gilts also regulated at steady prices, fetching $46 to $56. Boar prices ranged between $20 and $30, and $15 to $25 for lower grade animals.

Conclusion: Pork Value Declines

Overall, pork values faced a downturn, closing down $1.49 at $90.82, with categories such as loins, hams, butts, ribs, and picnics reflecting lower prices. Interestingly, bellies were the exception, showcasing an upward price trajectory. The estimated hog slaughter reached a total of 489,000 head, up by 12,000 from the preceding week and about 10,000 head more year-on-year.

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