Analysis: Cattle

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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July Cattle on Feed

Jul 21, 4:46 pm | Cattle

The July cattle on feed report is viewed as bearish relative to expectations, on much larger than expected placements. July 1st cattle on feed were reported at 104% of a year ago versus expectations of 103%, or a difference of about 165,000 head. The larger on feed figure is expected to have CME cattle futures under pressure at Monday’s open, despite Friday afternoon strength in cash cattle trade.   Feeder cattle placements in June were at 116% of a year ago, versus the average estimate that called for a placement rate of 106%. Feedlots placed 1.77 million feeder cattle in the month, which was the largest June placement figure since 2006. Placements were up in all of the major cattle…

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July WASDE Livestock Price Forecasts

Jul 20, 2:44 pm | Cattle, Hogs & Pork

The July WASDE report featured pork production and price forecasts adjusted to the the June inventory data for the remainder of 2017 and through the 1st half of 2018. Minimal adjustments to quarterly production forecasts were made, with a slight increase for the 4th quarter, while the 1st quarter of 2018 was barely lowered. But production in both quarter are projected to be record large. The Oct-Dec average live hog price forecast was unchanged at $41-45, and th 1st quarter forecast was increased by $3 to $48-52. The chart plots the July WASDE 1st quarter forecast against actual prices. CME Feb/Apr hog futures adjusted to a live equivalent, with normal basis are pricing in a 1st quarter average live price…

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3rd Quarter Cattle Price Outlook

Jun 28, 4:27 pm | Cattle

The recovery that occurred in cash cattle prices from last October’s low of $98, to the spring high of $145 was a record. The rally lasted far longer and went far higher than even the most bullish analysts had anticipated. But sadly, last week’s near $9 break in the 5 Area steer price took out several layers of support, and looks to be confirming a seasonal top, and early sales this week have been a couple dollars lower. The market’s focus now is on pricing in a seasonal summer low. Based on increased feeder cattle supplies and larger on feed totals, the CME is pricing in a further decline through the summer, with even lower prices offered today for the…

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June 1 Cattle on Feed

Jun 23, 4:26 pm | Cattle

The June Cattle on Feed report is viewed as neutral to slightly bearish relative to expectations. NASS reported a May placement figure of 112% of last year versus expectations of 110%, while the marketing rate of 109% was right at expectations. The combined figures resulted in a 98,000 head increase in cattle and put June 1 on feed supplies at 103% of a year ago versus the average trade estimate that called for 102%.     NASS reported that 2.2 million head of feeder cattle were moved from pasture to feedlot during the month of May, which was the largest May placement rate in the last 12 years. Placements increased in almost every state, with the largest increase noted in…

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