Feed pushes futures
Commodity fund money has poured into the Chicago cattle markets, pushing futures prices to record levels.
One factor in the rally was rising corn prices that are expected to cause cattle producers to cull herds.
Another factor was expectation that the U.S. Department of Agriculture cattle-on-feed report June 20 would show fewer animals in feedlots.
The report confirmed there were only 10.814 million cattle in feedlots June 1, or 96 percent of a year ago. Analysts expected 96.6 percent.
USDA put May placements at 1.899 million head, or 88 percent of a year ago, and May marketings at 2.14 million, or 103 percent. Analysts, on average, expected placements at 90.9 percent and marketings at 101.9 million.
Read Also
Canada-U.S. trade relationship called complex
Trade issues existed long before U.S. president Donald Trump and his on-again, off-again tariffs came along, said panelists at a policy summit last month.
The market now projects prices next winter will be much higher than they were this winter. That would require higher beef prices and analysts wonder if that is sustainable or whether high prices will force beef consumption to drop.
Another factor in the market is a new agreement where South Korea would allow import of U.S. beef from cattle younger than 30 months.
Cash fed market strong
Rising futures and a weaker Canadian dollar saw the steer average rise to $90.67 per hundredweight, up $2.54 from the week before, said Canfax.
The heifer average rose $2.29 to $89.71.
Cash cattle offerings were smaller as many feedlots sat on the fence to await better prices, Canfax said.
Volume dropped one percent to about 22,000 head.
The cash to futures basis narrowed to $6 under compared to $8.88 under the week before.
USDA statistics show 9,097 Canadian cattle entered the U.S., down 10 percent from the week before but 10 percent higher than last year.
The stronger market should cause feedlots to increase show lists this week. Higher packer margins should encourage steady demand and prices. Exports to the U.S. should see an increase in the next two weeks, Canfax said.
Slaughter cows rise
D1, 2 cows in Alberta rose 54 cents to average $45.17 for the week. That was $1.76 higher than a year ago, said Canfax.
Cow slaughter in Canada so far this year totals 340,000, up 3.8 percent from last year.
Cow exports to U.S. slaughter total 85,398 so far. Combined, that’s 426,000 cows sent to slaughter this year, a 25 percent increase over last year at the same time.
Canfax said cow slaughter and exports could reach 940,000 by the end of the year, the most since 1996.
Butcher bulls averaged $54.79, up $1.65 from the week before and $12.66 higher than last year.
Beef rises
U.S. Choice cutouts rose $1.58 US to close June 19 at $158.38. Select rose 25 cents to $152.72.
Calgary wholesale price for delivery this week was $151-$154 Cdn. Montreal was $158-$160, Canfax said.
Steers down, heifers up
The feeder steer weekly average for all weights fell 68 cents per cwt. from the week before while the heifer average rose $1.95.
Last week’s volume was 24,300 head, up 20 percent from the week before and 45 percent higher than the same week last year.
Steers heavier than 700 pounds rose $1.20 and heifers were $3.27 higher.
Steers lighter than 700 lb. were $2.08 lower and heifers were 97 cents higher.
There are signs of strength in heavier short-fed cattle and some nervousness in lighter longer-fed feeders.
Exports to the U.S. totalled 13,921 head, up 15 percent from the week before. In the same week last year, only 5,131 went south.
Feeder cattle volumes should fall this week. Demand remains good despite higher corn and barley futures.
In light trade, bred cows were $550-$1,100, with an average of $750.
Hog prices jump higher
Chicago hog futures for 2009 hit records as traders expect high feed prices will force herd liquidation.
Midwest flooding impeded hog deliveries and kept two slaughter plants closed last week.
Pork prices rose as retailers bought for the July long weekend.
Market-ready hogs supplies are seasonally tight.
Iowa-southern Minnesota cash hogs rose to $55 US per cwt. June 20 from $52.50 June 13.
The U.S. composite pork carcass cut-out value jumped to $80 June 20, up from $74.75 June 13.
U.S. slaughter for the week ending June 21 was estimated at 2.08 million, down from 2.05 million the week before, but 7.5 percent more than last year.
Bison steady
The Canadian Bison Association said markets were steady.
Some markets report discounts on overfat heifers Grade A carcasses from youthful bulls in the desirable weight range in Canada were $2.05 Cdn to $2.25 per lb. hot hanging weight Heifers were $1.95 to $2.20 per lb. Cull cows and bulls were 90 cents to $1 per lb.
Lambs steady
Ontario Stockyards reported 1,674 sheep and lambs and 249 goats traded June 16.
All lambs, sheep and goats were steady.
