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Cattle on feed report

redrobin

Well-known member
Cattle on feed, placements up, feedyards down
John Maday, Managing Editor | Updated: February 19, 2011 |

From Drovers website:
USDA’s February Cattle on Feed report shows February 1 feedyard inventories at 11.6 million head, up 6 percent from a year earlier. With the market providing plenty of optimism, placements in feedlots during January totaled 1.90 million, up 4 percent from January 2010. Feedyards placed more cattle than they sold during January, with marketings totaling 1.78 million head, up slightly from last year.

Somewhat surprising is that cattle in the lightest weight category accounted for the largest increase in placements. Placements in the under-600-pounds category totaled 465,000, up from 395,000 in January 2010. Placements in the 600- to 699-pound class were up modestly, while those in the heavier weight classes – 700 to 799 and over 800 pounds – declined from those of a year ago.

My personal take on the report combined with the seasonal killer cow prices is that we're in for more upward movement on most classes of cattle. If light weight stockers have been moved forward into the lots there is less remaining for the grassers to purchase, combine that with killer cow prices which I think will approach a dollar by spring grilling season and we could see some pretty significant pricing. Of course we don't know about the unknown so who knows. :lol:
 

nortexsook

Well-known member
I agree with your take. The industry seems to be 'eating its seed corn'. I think we will see very near 1.00 on cutter cows later this spring.
 

Ben H

Well-known member
If prices get too high, I'll need to higher Mercs to protect my breeding herd! Seriously though, I made this map for my customers to see where I run my animals, notice how many people I have around me. I'd hate to see them get too hungry.
http://maps.google.com/maps/ms?ie=U...13601426228797.00049c5d03c396055e8cf&t=h&z=12

There was an article a couple weeks ago on Drovers about the potential situation looming where we as producers get blamed as being greedy by the consumers once their prices get beyond a certain point.
 

redrobin

Well-known member
Livestock Call By John Otte
Tightening supplies lift feeder cattle record high, cash hog retreat continues.
John Otte
Published: Feb 18, 2011
February 18, 2011
Opens
Fed cattle, higher
Feeder cattle, steady
hogs, higher



Weakness in European markets and U.S. stock futures has Wall Street poised to start lower.

Overnight meat trade points mostly higher in front fed cattle and hog contracts.

Cash fed cattle. USDA reported mostly inactive negotiated cash trade on light demand Thursday in all feeding regions.

Traders generally expect this week's Plains cash cattle to trade around $108 to $109, up from $106 to $107 last week. Smaller show lists and tightening supplies are constructive.

February fed cattle hitting $110.80 over is constructive for cash trade. Yesterday's cutout weakness is not.

At midday Thursday Choice cutout was down 28 cents. Select was up 8 cents. Afternoon boxed beef cutout values were lower on fairly good demand and moderate to heavy offerings. Choice was down $1.23 at $167.22. Select slipped $1.24 to $166.67. Load count totaled 291.

USDA estimated Thursday's slaughter at 130,000. Total so far this week is 514,000 vs. 497,000 last week and 483,000 a year ago.

Cattle futures. CME live cattle settled sharply higher Thursday amid expectations for cash prices to be up about $2 this week.

General commodity buying interest as a hedge against fears of inflation also may have strengthened through the pit session. The U.S. dollar weakened, sending investors into riskier investments.

October and December live cattle contracts moved above the psychological barrier of $120 Thursday. Thursday's close above this point could bring in more speculative buying as investors probe upside potential.

Trade chatter hints that December could go much higher. Some project a peak around $140 before it expires at year's end.

Most-active April fed cattle settled 92 cents higher at $115.10. The soon-to-expire February position settled $1.27 higher at $110.27.

Yesterday the CME listed 21 new tenders. Total delivery notices for the February contract stand at 142 contracts.

April and June contracts are nearing historic highs and are at levels that many long-time traders find hard to believe will last. The April contract is more than $5 higher than the record cash price of $110 a cwt. set on Oct. 13, 2003. This was a spike week since prices the week before were about $94 and the week after, it was $98, highlighting just how unusual such a price is.

Thursday's wholesale beef price weakness is not constructive. Reports are surfacing of consumer resistance to higher supermarket prices.

Feeder cattle. CME feeder cattle made record highs again Thursday, with March besting its previous record that was set Wednesday. Buyers are becoming increasingly concerned about tightening supplies of feeder cattle as the herd dwindles.

March feeder cattle gained 12 cents to $130.60. April advanced 15 cents to $132.37.

Cattle on feed report. A Dow Jones survey shows traders expect this afternoon's USDA report to show:
* Feb. 1, 2011 cattle on feed at 105.1%, ranging from 104.0% to 106.0% of the Feb. 1, 2010 figure.
* January placements at 103.5%, ranging from 98.0% to 109.2%.
*January marketings at 100.6%, ranging from 99.0% to 103.0.

Recent CME live cattle futures have been high enough to entice placements. Breakeven projections by the Livestock Marketing Information Center have risen from $105.64 for cattle delivered in December to $115.46 for May marketings. But June futures are roughly covering those projected breakevens. In the past, placements have risen on worse profit prospects.

But many feel that January could be the last month of greater-than-year-ago placements as feeder cattle supplies dwindle. Should placements continue to run higher than year- ago levels, the feeder cattle situation for this spring and summer will become even tighter, given USDA's January 1 estimates of feeder cattle numbers outside of feedlots.

Cash hogs. Predictions for today's Midwest direct hogs are mostly flat to weaker.

Thursday's hogs sold flat to $1 lower on thin buying interest. Most packers bid only for next week's delivery since they are full for this week.

USDA's afternoon report showed Thursday's:
* Iowa-Minnesota hogs fell $1.02 to average $77.04
* Western Corn Belt hogs slid $1.25 to average $77.15.
* Eastern Corn Belt prices dipped 54 cents to average $79.05.
Prices changes are compared to USDA's prior day report for Wednesday.

Recovery in picnics and gains in loins and hams took Thursday's pork cutout 70 cents higher to $89.75. Load count totaled 74.

USDA estimated Thursday's slaughter at 370,000. That's well below Wednesday's 421,000 due to disrupted operations at three eastern plants owned by Smithfield Foods. The downtime is expected to be made up between today and Saturday, so the week's total is still projected to be in the area of 2.1 million.

Terminal hogs sold flat to lower. Live tops ran $56 to $57.50.

CME hogs. Lean hog futures closed higher in most contracts amid widespread commodity buying. Hogs rallied along with gains in live cattle and corn futures, leading to short-covering by some traders.

Trade chatter suggests the turnaround occurred despite a lack of any real positive indications from the cash or wholesale pork markets.

April lean hogs closed up 27 cents at $92.17. May gained a dime to $100.30.

June climbed 62 cents to $102.60.
 

redrobin

Well-known member
from drovers


Canada Cattle Report: Fed prices fall with light trade
Canadian Cattlemen's Association | Updated: February 25, 2011 |


Western Canadian fed cattle prices fell last week despite tight supplies and strong live cattle futures. The week’s larger fed offering saw light trade at $1.00/cwt lower on Tuesday but by Wednesday bids had eased $3.00 lower creating a standoff. Buyer response to aggressive asking prices was disciplined after having to pony up to cover short term needs earlier this month. The Canfax weighted average fed steer price last week was $105.55/cwt, down $1.31/cwt compared to the previous week, while heifers were down $1.77/cwt to close the week at $104.86/cwt. Last week’s sales volumes were around 12,000, 17% smaller than the previous week and 42% smaller than the same week last year. USDA reported the number of Canadian fed cattle exported to the US for the week ending February 5th were just over 8,000 head, 19% lower than the previous week. Year to date exports of fed cattle to the US are just over 48,000, 11% smaller than the same time period last year. Last week feeder cattle traded steady to slightly higher. Buyers looking for handy weight grass cattle put additional value on these calves and mid weight stockers, while heavier feeders experienced confined price movement. The Canfax average feeder steer price last week was up over $2.00/cwt compared to the previous week and heifer prices were up $1.70/cwt. Alberta auction volumes were just over 41,000 head. USDA reported feeder exports to the US for the week ending February 5th to be over 1,100 head, 60% lower than the same week last year. YTD feeder exports of 6,330 head were down 22% from the same period last year. Last week D1,D2 cows traded $2.50/cwt higher for a Canfax average price of $69.25/cwt and D3 cows saw similar gains averaging $58.50/cwt. Demand for Butcher bulls was strong which drove prices $3.00/cwt higher for an average of almost $76.75/cwt. A good supply of bred cows were on offering; ranging from $1,100.00-1,475.00.

Bull factors

*

Local carcass weights have declining rapidly.
*

Feedlot inventories are still quite current.
*

Cattle futures are supportive of cash trade.

Bear factors

*

Packer margins are negative.
*

Softer packer interest has resulted in fed inventory carryover.
*

US cattle on feed numbers on February 1st are 6% larger than 1 year ago.

For more detailed information on markets this week please visit the Canfax website
 
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