Livestock trends diverge
Cattle and hog markets moved in opposite directions as the former rose on strong beef prices and the latter dropped after a U.S. Department of Agriculture report showed a larger than expected U.S. hog herd.
Fed cattle prices rise
Normally cattle prices decline into summer, but a strong rally is occurring, driven by strong U.S. domestic demand, hope for increased exports and rallying futures prices driven by expectation that high corn prices will force cattle herd downsizing.
Read Also
Bond market seen as crop price threat
A grain market analyst believes the bond market is about to collapse and that could drive down commodity values.
Although U.S. cattle slaughter is up two percent so far this year, reduced beef imports and strong beef exports mean the U.S. beef market is fairly tight.
The strong U.S. market lifted Canadian prices.
Canfax said steers in Alberta averaged $92.76 per hundredweight, up $2.09 from the week before and heifers rose $2.65 to $92.36.
Sale volumes were one percent lower than the week before at 21,500 head.
The cash to futures basis this week widened slightly to $6.48 under compared to $6 under the week before.
Cows rise
D1, 2 cows in Alberta saw steady demand with the average rising a penny to $45.18. That was $3.25 higher than the same time last year. Canadian cow slaughter totals 340,000 head, up from 328,000 a year ago.
Butcher bulls averaged $55.98, up $1.19 from the week before and $15.91 higher than last year.
Canfax expects a steady market this week.
U.S. beef prices rise
U.S. beef cutouts jumped higher with Choice up $6.45 to close June 26 at $164.83 US and Select up $6.93 to $159.65.
Calgary wholesale market for delivery this week is up slightly at $152-$156 Cdn. The Montreal wholesale market was steady at $158-$160.
To mid June, Canada has imported 50 percent more beef from the U.S. than it did last year at the same time.
Canfax said this is because of a large reduction in domestic slaughter in Eastern Canada that has resulted in reduced domestic supplies of middle meats and other products.
The reduction in domestic supplies led to the Canadian cutout trading at a premium to the U.S. for much of 2007 and 2008, thus attracting increased imports from the U.S.
Also, the appreciated Canadian dollar has made this country a relatively attractive market for U.S. beef exporters.
Feeder numbers down
Volumes totalled 20,443, down 16 percent from the week before, said Canfax.
Feeder cattle saw steady demand despite higher corn and barley prices, with steers averaging $1.05 per cwt. higher and heifers 46 cents higher.
Lighter feeder cattle made up some lost ground to the heavy feeders especially in the heifer trade, said Canfax.
For Alberta and Saskatchewan, steers heavier than 700 lb. rose 40 cents and heifers in the same range were $1.06 lower.
Steers lighter than 700 lb. were $1.44 higher and heifers were $1.86 higher.
Exports to the U.S. two weeks ago slowed, totalling 9,837, down from 13,921 the week before.
Feeder cattle volume should follow the seasonal pattern and drop. Demand should be strong, said Canfax.
With futures prices stronger for late fall and early winter, demand should remain strong as contracts and hedges are locked in based on forecast lower fed supplies.
Bred cows traded at $500-$1,100 with an average of $740 on light seasonal volume. Cow-calf pairs averaged $935 for the week, $50 higher than the week before but $103 lower than the same period last year.
The range for cow-calf pairs was $350-$1,400, likely reflecting quality.
More U.S. hogs
The United States Department of Agriculture found more hogs on farms than expected, pressuring hog markets lower. The June 1 hog supply report released June 27 said the hog supply was up six percent over a year ago. The average of analysts’ pre-report expectations was a 4.7 percent increase.
The supply of market hogs was up seven percent, versus the average trade estimate of a 5.2 percent increase.
The breeding herd was down one percent, which was close to the average trade estimate.
Hog numbers are up because several years of profitable hog markets had encouraged U.S. producers to expand herds. Also, greater use of vaccines to control circovirus disease led to more pigs surviving.
High feed costs are now causing American producers to begin to cut breeding herds, but the pace has been slow so far.
Iowa-southern Minnesota cash hogs climbed early in the week but settled back to $55 US per cwt. June 27, steady with June 20.
The U.S. composite pork carcass cut-out values were near $80 through most of last week, about equal to the value June 20.
U.S. slaughter for the week ending June 27 was estimated at 2.13 million, up from 2.08 million the week before, but 9.5 percent more than last year.
Bison steady
The Canadian Bison Association said markets were steady.
Grade A carcasses from youthful bulls in the desirable weight range in Canada were $2.05-$2.25 per lb. hot hanging weight Heifers were $1.95-$2.20 per lb. Cull cows and bulls were 90 cents to $1 per lb.
Thin lambs down
Ontario Stockyards reported 1,869 sheep and lambs and 128 goats traded June 23.
Grain fed lambs were steady but plain, thin lambs were under pressure. Sheep and goats were steady.
Beaver Hill Auction in Tofield, Alta., reported 1,232 sheep and lambs and 195 goats traded June 23.
Mutton, feeder lambs and goats were all down $20-$30 per cwt. and good fat lambs and goats ready to kill were steady to higher. Producers are encouraged to finish stock because high feed costs are depressing the feeder market.
Lambs lighter than 70 lb. were $125-$160 per cwt. Lambs 70 to 85 lb. were $130-$159, 86 to 105 lb. were $125-$165 and those heavier than 105 lb. were $135-$145.
Rams were $35-$45 per cwt. Cull ewes were $25-$40 per cwt. Poorly finished kid goats were $130-$170. Good kid goats were $180-$220.
Nannies were $46-$98 per cwt. and mature billies were $90-$165.
