Beef market feels tremors
The Jan. 21 United States Department of Agriculture report of cattle on feed signaled a slight tarnishing of the fed cattle market.
The number of cattle placed in feedlots was up 13 percent over the same time the previous year. But marketings were up only one percent, leaving cattle on feed at a record, up eight percent over last year.
Some traders are concerned that slaughter numbers are running under last year.
Given the large number of cattle reaching market weight, slaughter should be rising. If it doesn’t, the implication is that the system will get backed up with heavy animals.
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In the U.S., fed cattle traded $1 (U.S.) per hundredweight lower. Feeders were $1-$2 lower and calves traded steady to $2 lower. Trade volume was moderate.
In Western Canada, average fed cattle prices fell $1.50 per cwt. on steers and $2 lower on heifers last week, said Canfax.
Offerings were limited, with the total sold at 12,000 head.
Some feedlots opted not to offer cattle while a few others chose to pass at the lower prices. The smaller kills enabled packers to build adequate inventory for their immediate requirements.
The U.S. market is still not a key buyer but that could change soon.
Prices Jan. 20 were steers $93.90-$94.40 per cwt., flat rail $158.30-$160 and heifers $93.60-$95, flat rail $159.50-$160.
Beef movement is still considered sluggish.
Wholesale beef prices are generally steady to lower with the Montreal price on steers now steady to $2 lower at $166-$168 per cwt. In Calgary, handyweight steers are $157-$172, with tops to $178.
With packers in good supply and feeders less aggressive in their marketings, weights are creeping up.
The warm winter has allowed cattle to gain weight fast and last week the average steer weight was 821 pounds compared to 790 lb. for the same week last year.
Canfax thinks the fed cattle market will be steady to $1 lower this week.
Cow prices were mainly steady but fell by week’s end by $2-$3 per cwt. Prices could fall again this week.
Feeder prices were steady with indications of slightly lower yearling prices by week’s end in some areas.
While the average didn’t change, there were reports late in the week of 800 lb. and heavier steers dropping $2-$3 per cwt. due to pressure on the fed market, as well as a lower feeder futures market, said Canfax.
However, lightweight cattle prices are still good and should remain steady on lightweight steers.
If yearling volumes are spread out over the next month, prices might not change, but if offerings become large, prices might slip.
In stock cow trade, bred cows were $575-$1,400 with most from $850-$1,200. Bred heifers were $800-$1,170. Cow-calf pairs were $1,100-$1,340.
Outlook: Steady to $1 lower on fed cattle, feeders and calves steady.
Storm raises hog prices
U.S. hog market prices fluctuated at the beginning of the week as packers tried to secure supplies and protect their profit margins while pork cut-out values fell.
But midweek, storms hit the Midwest causing packers to bid up to secure supplies.
The fewer hog marketings led to slaughter cutbacks, which increased pork cut-out values.
There is no sign of the strong demand for pork weakening in the immediate future, so the outlook for cash and futures prices remain optimistic.
The at-plant Iowa-southern Minnesota hog price range 51-52 percent lean, live equivalent, was $31-$41.25 (U.S.) per cwt. Jan. 21 with a mean of $38.51, up 63 cents from the previous week.
Lean hog futures prices hit new highs in the April and June contracts, based first on technical buying, then on news of the winter storms.
Average Manitoba Index 100 hog prices (including premiums) increased about $2 per 100 kilograms to an estimated average price of $139 per ckg, said the department.
