Analysis: Cattle

US Livestock Herd Update

Mar 14, 10:39 am | Cattle, Hogs & Pork, Poultry

NASS is in the process of collecting and tabulating pork producer surveys for the March inventory report that will be released at the end of the month. The December Hogs and Pigs report showed that the US hog breeding herd had grown by 1.5% from the previous year, and was the largest since 2007. Producers also indicated to the USDA that they intended to farrow 1% more sows in both the Dec-Feb and Mar-May quarters. Both the inventory data and producer intentions ran opposite of the economic signal that the market has been sending since the spring of 2016, which was “slow down”. The latest slaughter data indicates that producers may finally be paring back sow inventories, slightly. The weekly…

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March WASDE Livestock Price Forecasts

Mar 10, 3:13 pm | Cattle, Hogs & Pork

The March WASDE report featured adjustments to price and production forecasts for the 1st half of the year, while forecasts beyond June were unchanged from the prior report. The USDA estimates that the record large production will continue into the 3rd quarter, Jul-Sep pork output estimated to increase 5% year over year. In the price outlook, the USDA estimates a 3rd quarter average live hog price of $43-47 versus $49 last year. If realized, this would put the quarterly average at the lowest in 8 years. The CME and the USDA have been in sharp disagreement of forward hog values for many months, with deferred hog futures finding support from nearby cash strength. The CME today looks to be pricing in a…

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February Cattle on Feed Report

Feb 24, 4:05 pm | Cattle

The February Cattle on Feed report was about as bland as possible, with all of the headline statistics coming in right at expectations. February 1st cattle on feed supplies at 10.8 million head was barely over a year ago, though supplies remain historically low. Relative to expectations, the report is neutral and not likely to have a major impact on the CME cattle trade on Monday.      The January placement rate was just barely above expectations, but also at a 3 year high of 1.981 million head. In the major cattle feeding states, KS placed 65,000 head more than last year, NE placements were up 50,000 head, and TX put 25,000 more on feed than a year ago. CO…

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Red Meat Exports in December

Feb 8, 2:35 pm | Cattle, Hogs & Pork

US pork exports totaled 493 Mil Lbs in December, down slightly from the all time record that was set in November, but still the 2nd largest December shipment figure on record. Quarterly exports were at 115% of a year ago while annual exports were at 104%, and the largest annual export rate in 4 years. For the year, Mexico was by far the largest destination, with 31% of total exports going South of the border. Japan was the 2nd largest destination, though compared to a year ago total exports were down 5%. The largest source of growth for 2016 was in exports to China, where 2016 exports were at 198% of the previous year and accounted for much of the…

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January 1 Cattle Inventory

Jan 31, 4:46 pm | Cattle

Relative to trade estimates, the January Cattle report was quite mixed. NASS did make some rather significant revisions to the 2016 inventor totals, but as expected the report confirmed a significant increase in the 2017 cattle and calf herd. The January 1st beef cow numbers were up 1.044 Mil head (3.5%) from a year ago, even as estimated cow/calf margins for 2016 showed red ink for the first time in 7 years. Margins in 2014 were estimated in excess of $500/cow, while estimates for 2016 show a loss of nearly $30. As seen in the chart, herd expansion was the largest in 23 years, and the first time that the cow herd has increased for 3 consecutive years since the…

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January Cattle on Feed Report

Jan 27, 4:17 pm | Cattle

The January Cattle on Feed report is viewed as bearish for cattle futures at the start of next week’s trade. The December placement rate was far larger than expected, and well above the range of expectations. Cattle on feed supplies were just above 100% of a year ago, versus the average estimate that called for 99%. The difference is about 136,000 head more on feed than was expected.     The big surprise in the report was the December placement rate. The average trade estimate had called for placements at 108% of a year ago, though actual placements were at 118% and also the largest Dec placement rate in 5 years. This was one of the largest misses by the…

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January WASDE Livestock Price Forecasts

Jan 24, 1:58 pm | Cattle, Hogs & Pork

In the January WASDE report, the USDA updated production and price forecasts according to the December inventory figures. The largest change was to 2nd quarter production, which was increased by 3% from the previous estimate, and projects Apr-Jun pork production at a record large 6.4 Bil Lbs or 107% of a year ago. As the production estimate increased, the USDA also lowered the live hog price forecast for the 2nd quarter to $38-40 live ($51-54 lean). While the USDA lowered their price outlook, CME futures for the 2nd quarter have traded higher since both the inventory report and the January WASDE. The market today is reflecting a 2nd quarter average live price near $55 ($75 lean), which if realized would…

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Red Meat Trade Update

Jan 9, 3:04 pm | Cattle, Hogs & Pork

   Last week’s International Trade report showed a big jump in US beef exports during the month of November, with shipments totaling 253 Mil Lbs for the month. This was a 25% increase over last year, the largest 1 month export total since July 2013, and the 5th largest monthly export total on record. Beef production in November was up 16% year over year and the largest November figure on record, and so the extra supply allowed for a stronger export rate. 11% of all the beef produced during the month was exported, up from both last year and the 5 year average that are both equal to 10%. Cumulative exports for the year are at 111% of 2016, and…

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Cattle On Feed And Hog Inventory Estimates

Dec 22, 8:02 am | Cattle, Hogs & Pork

While the CME livestock markets are scheduled for an early Friday close, followed by a short trading week, the USDA will have an early release of several key livestock reports just ahead of the close on Friday. Up until this past year, Cattle on Feed reports have rarely had much of an impact on CME cattle futures trade, largely because pre report estimates tend to be close to actual figures. This past year, the average estimate has had some pretty spectacular misses, resulting elevated, post report volatility. Ahead of the December report, the average guess calls for a November placement rate at 112% of a year ago and a marketing rate of 116%, with total December 1 cattle on feed…

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Red Meat Exports In October

Dec 7, 1:31 pm | Cattle, Hogs & Pork

The International Trade report on Tuesday showed beef exports during the month of October were slightly better than expected, and also at a new high for the year at 229 Mil Lbs. This lifts the year to date total to just over 2 Bil Lbs or 9% more than last year’s exceptionally slow export rate.   The USDA recently lowered their forecast for 4th quarter exports, and to reach both the quarterly and annual forecast, November and December shipments need only match the 5 year average. The lag between changes in US meat prices and a response in exports is often several months. But given much cheaper wholesale values, a much more improved outlook is offered for beef exports in…

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