CME: Lean Hog Contract Prices All Lower Week-over-week

US - In the livestock futures markets last week, using an average of the daily closing prices, the nearby (October 2017) Live Cattle (fed animal) contract averaged $106.23 per cwt., slipping $0.46 week-over-week, reports Steiner Consulting Group, DLR Division, Inc.
calendar icon 6 September 2017
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That price has eroded for four consecutive weeks. But not all the Live Cattle contracts were lower last week, the April 2018 contract increased by $1.68 per cwt. averaging $113.77. Feeder Cattle contract prices were up, for example, week-over-week October’s was $2.42 per cwt. higher week-over-week, which was the strongest in four weeks. The April 2018 Feeder Cattle contract also was the highest in four weeks, it averaged $144.18 last week (rising $1.56 per cwt. compared to the prior week).

Lean Hog contract prices were all lower week-over-week. October’s contract dropped by $2.58 per cwt. for the week, averaging $61.21. That contract has declined by $7.10 per cwt. during the last three weeks. The December Lean Hog contract averaged $57.40 , down $1.79 from the prior week’s and had declined by $5.15 during the last three weeks.

Our weekly production and cash prices summary of USDA's Agricultural Marketing Service (AMS) data is at the bottom of this page. As reported by AMS, negotiated fed steer prices declined week-over-week. The 5-Market Average steer price was down about $2.00 per cwt. (2.0 per cent) for the week and below a year ago by 4.6 per cent. Oklahoma City posted higher feeder steer (600– to-700 pounds) prices, up about $4.00 per cwt. for the week (increased 2.8 per cent) and 11.7 per cent above a year ago.

In Iowa and Southern Minnesota, the negotiated (cash) slaughter hog market fell nearly $6.00 per cwt. (down 8.4 per cent) last week, but was still above 2016’s (up 6.0 per cent). The Choice beef cutout (wholesale carcass composite value) slightly declined for the week (down 0.3 per cent) and was down 2.1 per cent year-over-year. In the wholesale pork market, the cutout value fell 4.0 per cent week-over-week and was 9.0 per cent below 2016’s.

The preliminary carcass weights (also referred to as dressed weight) for last week, as calculated by USDA-AMS are shown on the next page. Those weights are not measured, they are simply a calculated average of prior reported data. The calculated dressed weights were slightly below a year ago for both cattle and hogs. However, USDA has significantly raised the preliminary cattle dressed weight for many weeks, which of course is a function of their calculation method.

When dressed weight is revised higher so is tonnage produced, if slaughter levels are not adjusted down. The actual weekly dressed weights are available with a delay, and the latest data (released last Thursday for the week ending 19 August) are used in the following graphics. (Note that we show steer not overall cattle dressed weight which would also include heifers, cows, and bulls.) Within the year, many factors can influence dressed weights, but the normal seasonal patterns are apparent in the graphics below.

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