Western Producer Livestock Report

Animal futures

Worries about food inflation appeared to entice investors to put money into commodities, particularly cattle and hogs, driving up futures prices in both markets last week.

South Korea’s government said it might reopen negotiations about relaxing import rules for U.S. beef.

In Canada, fed cattle prices were mostly steady last week, said Canfax.

Steers averaged $91.45 per hundredweight, down 11 cents and heifers were 25 cents higher, finishing the week at $90.95.

Sale volume was about 20,000 head, down four percent from the week before.

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Market-ready cattle were pulled forward and live weights dropped.

The cash to futures basis widened to $3.90 under compared to $1.64 under the week before.

Fed export volume was 10,505 head, up one percent from the week before and five percent lower than last year at the same time.

Tight fed supplies will continue for the next four weeks and a strong demand period is coming, said Canfax.

Beef stronger

U.S. Choice cutouts rose 92 cents to $155.18 US while Select fell 53 cents to $152.10.

Beef prices traditionally fall into July when they post their seasonal lows. But with tighter supplies expected in the second half, a counter-seasonal pricing year is anticipated with prices strengthening in the third quarter, Canfax said.

The George Morris Centre boxed beef commentary reported that beef margins at retail are above average.

Calgary wholesale prices for delivery this week are up $2 at $153-$155. Montreal rose $2 to $160-$161.

Feeder prices rise

Feeder cattle saw good demand with steer averages up 85 cents per cwt. and heifers up $1.29 from the week before, Canfax said.

Volume was up 24 percent from the week before and up 68 percent over last year. Volumes will likely start to decrease this week.

Steers weighing 800-900 pounds rose $2.43 while heifers heavier than 900 lb. fell 93 cents.

Feeder cattle exports totalled 12,845, down 18 percent from the week before.

Bred cows averaged $769.17 in light volume. That was up $16.04 from the week before, but $92.08 lower than the same period a year ago. Cow-calf pairs averaged $814.58 for the week, $182.08 less than last year at the same time.

D1, 2 cows fell $3.05 to average $46.76 for the week. Butcher bulls were steady at $51.09.

This week, slaughter cows and bulls should be steady to lower, Canfax said.

Feedlot supply down

Alberta and Saskatchewan feedlots had 10 percent fewer cattle than they did last year at the same time.

April placements rose seven percent from last year, Canfax said.

An expected decrease in red meat supply in the second half of the year and potential record fed prices in the fourth quarter saw feedlots placing speculative feeders while reasonable volumes are still available, Canfax said.

The Canfax survey group marketed 153,068 head in April, down eight percent from April last year. The low April marketings are a result of lower placements in November-December.

Hogs jump higher

U.S. cash hogs traded higher last week on tight supplies of market-ready animals, strong pork prices and rapid pork exports. On May 9, the U.S. Department of Agriculture raised its 2008 pork export estimate to 4.31 billion lb. from 3.74 billion and lowered its production estimate to 23.5 billion lb. from 23.6 billion.

Iowa-southern Minnesota cash hogs rose to $59.50 to $60 US per cwt. May 9, up from $55.50 May 2.

The U.S. composite pork carcass cut-out value rose to $78.77 May 9, up from $75.19 May 2.

U.S. slaughter for the week ending May 10 was estimated at 2.09 million, down from 2.16 million the week before.