Fed cattle drop again
Fed cattle started out last week with a fully steady range.
Calves were selling at the top end of the range, adding $1-$2 per
hundredweight to where most calves traded the previous week. However,
April 4 saw live cattle and feeder cattle futures drop the limit and
stay down for most of the day, mostly due to technical trading. That
led to pressure in the cash market, causing both Canada and the United
States to trade lower. Overall, steers and heifers traded an average of
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25 cents per cwt. lower than the previous week.
Volumes were up 50 percent from the previous week, with more calves
sold again last week.
Outside interest was apparent and helped support the Canadian market.
Thursday’s trade saw steers bring $102.75-$105.35 per cwt., flat rail
$173.25-$175 and heifers $101.75-$103.25, flat rail $170-$175.
Beef trade quiet
Beef sales were quiet with little post-Easter improvement. Most beef
sellers are hoping for better weather to encourage the start of the
barbecue season. Due to ample boxed supplies, some local plants only
killed four days last week.
Canfax said the Montreal wholesale is $2-$3 lower at $182 per cwt.
Credit values are steady at $95-$98.
In the U.S., fundamentals looked good for a rally over the next few
weeks with tight supplies and packers buying short.
However, pressure in the futures market has brought some of the bullish
psychology down.
Locally, some plants last week were cutting shifts and kill days
because of slow beef movement.
Feeder cattle trade higher
For the week ending April 5, feeder sales were mixed throughout the
week. Steers 600 pounds and heavier were mostly steady.
Lighter steers were steady except calves 500-600 lb., which ended the
week about $4 per cwt. lower. Heifer prices were mostly higher, with
heavier replacement type heifers trading $2.50 higher than the previous
week.
Volumes last week were smaller, even given that the previous week was
short – 27,500 head or 10 percent fewer cattle traded than the previous
week and 23 percent fewer than the same week last year. Some sales
early in the week reported smaller volumes due to short-lived winter
storms. Slaughter cows traded $1.25 lower this week.
The April 4 pressure on the Chicago Mercantile Exchange futures, as
well as the fed cattle cash trade may put the feeder market under some
pressure.
Grass type cattle and replacement quality heifers both have potential
for strength, particularly if the Prairies get the additional wet snow
or rain that is forecasted.
Bred cows sold from $900-$1,650 on good volume. Most cows traded from
$1,150-$1,350. Bred heifers sold from $985-$1,300 with most at
$1,100-$1,250. Cow-calf pairs sold more sets this week at prices
ranging from $950-$1,585, most from $1,200-$1,400.
Hog prices sink
Prices for wholesale pork, hogs and hog futures were down significantly
last week. U.S. packers responded to lower wholesale prices for pork
by lowering their bids for hogs. A downward price spiral was created,
which resulted in new contract lows for April through October.
The falling markets triggered technical trading, which further lowered
prices. One commodity trader described the sell-off as “ridiculous for
hogs and cattle.”
The Iowa-Minnesota daily direct hog price (at plant mean, 51-52 percent
lean, live equivalent) began at $37.10 US per cwt. on April 1, then
fell to $35.23 US per cwt. on April 4.
On average, last week’s hog price was about five percent below the
previous week. Pessimism was created by the lack of new demand from
domestic and export markets and the anticipation of large slaughter
numbers in the future.
U.S. agricultural economists revised price forecasts downward in
response to the USDA’s quarterly hog inventory report released March 28.
