Analysis: Cattle

Red Meat Exports in October

Dec 7, 12:19 pm | Cattle, Hogs & Pork

The December International Trade report showed that US exporters shipped 495 Mil Lbs of pork during the month of October, the largest amount in 5 months and also the largest October export total on record. Total exports for the year now stand at 4.6 Bil Lbs or 8% more than a year ago, versus the latest USDA forecast that calls for a 7% increase in annual exports. The 4th quarter forecast in November called for a 3% year over year increase, and the chart reflects November and December estimates that are needed to reach the USDA forecast. Given the production increase, along with much stronger than expected prices, we suspect that the actual export figures could be better than expected….

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US Feeder Cattle and Hog Imports

Nov 17, 2:07 pm | Cattle, Hogs & Pork

Despite a larger US cow herd and inventory of feeder cattle, feeder cattle prices have generally been above last year since May, with the cash feeder index this week at $158 versus $120 a year ago. Higher prices have not only benefitted the US cow/calf producers, but have also helped out other North American producers. Cumulative feeder cattle imports from Mexico through early October are up 28% from a year ago and total just under 885,000 head.   While imports of Mexican cattle have increased over last year, imports of Canadian cattle continue to decline. The latest trade data shows YTD imports from Canada are just short of 108,000 head, and are down 35% at a 6 year low. Volatility…

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November WASDE Livestock Price Forecasts

Nov 13, 3:19 pm | Cattle, Hogs & Pork

The November WASDE report featured modest changes to pork production and price forecasts for 2018, and no significant adjustments are expected until the January report when the December inventory data will be available. For the 2nd quarter of year, the USDA estimates pork production at 6,390 million pounds, a 4% increase over 2017 and the largest 2nd quarter production figure on record. This will also mark the 8th consecutive year of industry expansion for the quarter. The USDA’s price forecast for the quarter was also unchanged from October at $47-51 live, or down nearly $3 from 2017. CME hog futures on the other hand are still more optimistic, and this week are offering producers a 2nd quarter average live price…

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September Red Meat Exports

Nov 6, 1:22 pm | Cattle, Hogs & Pork

Last week’s International Trade report showed that US beef exports in September marked a fairly typical seasonal decline from August, but were still the largest September export figure on record at 243 million pounds. The September figure takes 3rd quarter exports to 746 million pounds, a 13% increase over last year, and also the largest 3rd quarter export total on record. Cumulative exports for the year are now just over 2 billion pounds, with only 1 other year (2011) having a larger beef export program. The chart shows monthly estimates for the 4th quarter based on the latest USDA forecast that calls for a 4th quarter export total of 745 million pounds. If realized exports for both the quarter and…

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October Cattle on Feed

Oct 20, 4:13 pm | Cattle

The October Cattle on Feed Report is viewed as bearish for CME cattle futures at next week’s open. September feedlot placements were well above expectations and October 1st cattle on feed supplies were at 105% of a year ago and slightly larger than the average trade estimate. The report confirms cattle on feed supplies at a 5 year high, and marks the 10th consecutive month that on feed supplies have been larger than the previous year.   The big surprise in the report was the September placement rate. The average trade estimate had called for placements at 108% of a year ago, while actual placements were at 113%. It’s worth noting that last year’s September placement total was at a…

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Livestock Feeding Spreads

Oct 19, 2:21 pm | Cattle, Hogs & Pork

  Hog feeders today are watching April hog futures, as weaned pigs that are placed today will be marketed against the April contract. April hogs bottomed in August, and this week are trading at a historically large $10 premium to the cash index, and are priced $16 higher than a year ago. The chart shows the April hog “crush” spread, or the hog feeding margin that can be locked in by selling April hogs, and buying March corn and soymeal. The spread this year is just under the 5 year average, but substantially higher than a year ago. Feed costs offered by the CBOT’s corn and soymeal markets are historically cheap, and basically unchanged from last year. However, cash hog…

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Red Meat Trade in July

Sep 7, 1:53 pm | Cattle, Hogs & Pork

The August International Trade report on Wednesday showed US pork exports totaled 390 Mil Lbs during the month of July, a sharp 58 Mil Lb (13%) drop from June, and the 2nd consecutive month of sharply lower trade. Pork exports typically decline through the summer months as US pork prices seasonal increase, though this year’s decline was much larger than normal as US pork prices traded to much higher than expected levels. This was also the largest decline in July exports on record. While pork shipments fell sharply, the July WASDE report increased the forecast for annual exports by 6 Mil Lbs to 5,753 Mil Lbs. The July trade data is a disappointment, but the current pace for annual exports…

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August Cattle on Feed

Aug 25, 4:13 pm | Cattle

The August Cattle on Feed report is viewed as mildly supportive, relative to trade estimates. The July placement rate fell short of expectations, and the marketing rate was also a little lighter. However, August 1st cattle on feed at 104% of a year ago was right at pre report estimates. NASS counted 10,604 thousand head on feed at the start of the month, which is the largest in 5 years. Fed supplies will remain abundant into year end.       Total feeder cattle placements in July were just above last year, the largest since 2013. However, the monthly total was 54,000 head fewer than the average trade estimate at 1.615 million head. Feeder cattle placements were higher in all…

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August WASDE Livestock Price Forecasts

Aug 14, 4:11 pm | Cattle, Hogs & Pork

The August WASDE report featured modest updates to the beef production and cattle price forecasts for the 1st quarter of 2018. Production was lowered by 220 Mil Lbs from the July forecast and projected at 6,325 Mil Lbs, but if realized would be the largest 1st quarter production rate since 2011. The USDA also lowered their price forecast range by $3, to $112-122 with a midpoint of $117. The chart plots the history of the midpoint of the August WASDE’s 1st quarter price forecast and actual prices. Note in the chart that the CME today is far more bearish on the 1st quarter than the USDA. CME Feb/Apr cattle futures with a normal basis, is offering cattle feeders the opportunity…

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US Red Meat Trade In June

Aug 7, 2:12 pm | Cattle, Hogs & Pork

Friday’s International Trade Report showed US pork exports for the month of June at 449 Mil Lbs, a 66 Mil Lbs decline from May but still 18 Mil Lbs more than a year ago. It was the largest June export total since 2008 and the 2nd largest on record, with strong year over year increases noted to most major destinations. Exports to China have so far been disappointing, as this was the market that many in trade had hoped would be a source of major export growth this year. Canadian imports are down slightly amid growth in the Canadian herd.  At mid year, the US has exported 2.9 Bil Lbs, a 12% increase over last year and 50% of the…

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