Fed cattle prices bounce around
Canfax reports fed cattle sales were erratic during the week ending
Dec. 21. They started on a weak note, firmed at mid-day on Dec. 19 and
settled back by the close of the week.
In the end, the weekly average was $1-$1.50 per hundredweight lower
than the previous week. Highs didn’t quite match those of the previous
week.
The offering was small with about 11,000 head trading but a fair number
passing at the lower bids, especially earlier in the week. Most buying
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interest came from Western Canada, although American buyers were
supportive at the lower end of the price range.
At times it appeared like one packer or another bought short but the
enthusiasm didn’t last long, reports Canfax.
Alberta steer weights dropped 11 pounds from the previous week on a
carcass weight, indicating packers have finally moved through the last
of the big, problem cattle.
Dec. 20 trade saw steers bring $96-$97 per cwt., flat rail
$161.65-$162.55 and heifers $95.25-$97.25.
Christmas disrupts beef deliveries
Little has changed on the wholesale beef side of the market. Deliveries
will be disrupted by the holidays and closures.
Kills will be significantly smaller due to the holiday shutdowns.
Wholesale prices have generally been established for a two-week period.
The Montreal price for the week ending Dec. 28 and the week ending Jan.
4, 2002, is down $2-$3 per cwt. from the previous week in a range of
$165-$168 per cwt.
The Calgary market is steady with handyweights at $162-$172.50 and a
few heavies at $160-$162.
Further pressure has been noted on hide prices.
Little activity
Canfax said little is expected to change with fed cattle prices over
the holiday season. Packers appear to have most of their requirements
taken care of for the short weeks.
If the United States can clean up some of its market-ready animal
problems, then hopes of better prices into January should materialize.
Alberta basis levels are still good, near par, so a Western Canadian
price rally isn’t in the cards unless the U.S. goes first, said Canfax.
Feeder volumes up
Feeder cattle and calf prices continued to see more price pressure for
the week ending Dec. 21, with averages about $5-$6 per cwt. lower on
the lighter calves and $3-$4 lower on the heavier feeders.
As feedlot pens filled up, orders were reduced or pulled. Some year-end
money was still floating around but even that wasn’t enough to hold the
market.
Volumes were down 35 percent from the previous week as one would expect
heading into Christmas, but still 15 percent bigger than the same week
last year.
Canfax said most markets would remain closed until after the new year,
so no new pricing was expected until after that. Even early in January
volumes will be small and dependent on weather conditions.
Large feedlot losses will continue to be a key point in feeder prices
early next year.
The U.S. feeder price will ultimately make the floor price for Canadian
feeders so basis and exchange rate become important in January and
February. A smaller cow run should prevail in the new year as well.
Bred cattle runs also slowed for the week ending Dec. 21, with some
prices quoted a little lower than the previous week although quality
was a factor in some cases.
Bred cows brought $900-$1,520 with the bulk in the $1,200-$1,400 range.
Bred heifers were $1,000-$1,520, with the bulk ranging from
$1,250-$1,350. Only a few cow-calf pairs traded and brought
$1,110-$1,350.
Hog market improves
Climbing U.S. pork cutout values earlier in the week ending Dec. 21
allowed packers to pay higher prices for hogs.
The Iowa-Minnesota daily direct hog price (mean, 51-52 percent lean,
live equivalent) rose from $34.68 US per cwt. on Dec. 17 to $36.22 US
per cwt. on Dec. 19, but declined slightly on Dec. 20. On average, hog
prices on the week ending Dec. 21 were about 4.5 percent above the
previous week’s price.
USDA’s cold storage report showed that stocks of pork bellies in
storage on Nov. 30 were well below projections.
Pork belly supplies are normally larger in November than October, but
this year’s increase was smaller than expected. The increase in total
pork supplies was also below traders’ expectations. However, gains in
hog and pork belly futures on Dec. 21 may be temporary as traders are
concerned that reduced hog slaughter during the holiday-shortened work
weeks could result in lower cash prices.
Hog prices are still expected to rise in January, particularly if cold
weather reduces hog growth rates and marketings.
The improvement in the U.S. hog market had a positive impact on
Manitoba hog prices for the week ending Dec. 21. However, the increase
in the average price was moderated by the effect of producer contracts
based on the previous week’s lower U.S. prices.
