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from the Cattle Report

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redrobin

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Does anyone have data that would reflect how many calves from last years calf crop are outside the feedlots? One would think we'd be very short on feeder cattle very soon.

MARCH 27, 2011



MARKET REPORT AND ANALYSIS



The numbers simply don't add up. Placements last fall were up from prior year -- month after month. Analysts have been calling for show lists to expand each week we move forward. Slaughter has been in decline running well under prior year. This set of facts has left industry participants puzzling over a build up and back up in fed cattle in the nation's feedlots. Instead of an expanding show list, packers are looking at a smaller show list this week and prospects of higher cash markets. Cattle owners are pricing most cattle at $128 following sales last week at $126-127.



USDA data showed that U.S. exporters sold 52,009 MT [metric tons] of beef in the week ended Mar 15, the largest total in over 10 years as South Korean purchases rose almost six fold to 10,592 MT and Japan bought 8,924 MT, up +142% from the previous week. The early year growth in exports had slowed so this reversal will be important for demand moving forward.



Box prices began the week with good volumes of sales and slightly weaker prices that firmed during the day. As pink slime moves off the newspages, most retailers are back to business as usual with more businesses offering ground beef with filler or without. Last week's smaller slaughter of 606,000 will put retailers back on the defensive at a time of year when people expect beef features. Choice cut out was lower at $188 and select at $187.50.



The next step in rebuilding is showing signs of beginning. The first step is establishing a broad pasture base allowing an expansion of the existing herd. This requires moisture for forage growth and that has happened across a broad swath of country including much of the drought out southwest. Next comes heifer and cow retention necessary for breeding and rebuilding a larger herd. Heifer prices are narrowing the discounts to steers -- a sign replacements are intended for breeding rather than finishing.



The March feeder cattle contract will expire this week and settle to the feeder index. Recent rains will curtail further the movement of cattle off pasture in a broad region across the southwest and southeast. Pasture operators wanted to restock will find fewer offerings and continuing price pressures. Oklahoma City cattle auction was active with good demand and higher prices. Yearlings were $3 higher and calves $5 higher as smaller receipts failed to match demand. A 750# feeder steer was selling for $155 on the southern plains.



Corn moved higher in overnight trading. USDA will release an acreage estimate this week. Early warm weather has put farmers to work planting what some people estimate to be a 95 million acre crop. The basis in Guymon Oklahoma is $.80 over December contract. Corn is now pricing into most rations at $12.70 cwt..
 

greybeard

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Correct me if I am wrong, are we exporting about 25% of the slaughter?
If imports from outside NA are too pricy due to low currency values and we are now starting look at short keep cows and any decent heifer as worthy of keeping at home, what happens next?
Sometimes commodity prices are described as "rocketing". Of course we all know that can't happen to beef, but I do Know you get a lot of tight holders if it looks like prices will be higher next week.
Supply and demand always trumps.
 

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