US perspective 15.05.08
15/04/2008
The Jacobsen Commentary and Market Opinion
Courtesy of www.thejacobsen.com
Interest and activity over the past week have not been as brisk when compared to the last few weeks, while the most recent USDA export sales report comes in once again slightly better than most anticipated. There were 531,600 wet-salted and 138,300 wet-blue hides sold during the APLF event in Hong Kong at the end of last month and the start of this. As far as this week is concerned, it appears most of the producers either limited their offerings or attempted to raise their asking prices; however, as of this writing we cannot confirm if any more money has been paid this week.
Trading levels we can confirm are HTS as high as $66, while HNS have traded as high as $67.50, while BBS have checked in at levels as high as $65.50. Other trading on steers indicate HNDS are worth as much as $66.50, BS have sold as high as $65, while CBS have exchanged hands at levels of $64. As it relates to heifer selections, although hide weights are following their seasonal trend and becoming lighter, this has not resulted in additional offers of heifers and it appears the few offers are easily being liquidated at levels of $57.50 for Brands and $59.50 for Natives.
As it pertains to cow selections, interest here has been similar to that of big-packer hides, supported by the large round of business over the past few weeks. This has allowed producers to establish a decent sold forward position and allowed them to obtain some incremental price improvement over the course of the last week or ten days. Trading levels we have picked up on include HNDC trading as high as $59, while HNC have sold as high as $55 and HBC at levels of $45. Meanwhile, interest on Bull hides remain very strong with trading levels as high as $63 on Natives recently, while Brands have checked in as high as $58.
In the meantime, the nation’s slaughter has not followed its usual seasonal trend of moving higher since the Easter Holiday as beef demand has not supported higher numbers. This coupled with the nation’s hog slaughter running at levels 10% higher than a year ago and broiler slaughter running at levels 5% above a year ago and beef packers facing margins of $20 a head in the red. This appears to be keeping the nation’s bovine slaughter in check.
Cattle markets USA—14.04.08
Courtesy of AgCenter
Two pressures will push show lists higher in the coming weeks. Increased placements from the fall will join with incentives to market because of high corn costs. The result will be determined by the sensitive area of demand. Demand should be improving into the spring as the cookout season begins. Cattle owners will fight to continue the small gains of $1 last week in the south [$87] and larger gains $4 in the north [$142]. Beef tonnage continues to be increased by the margins of surplus over last year’s carcass weights.
Box prices worked higher all of last week. Choice ended the week at $143 and select at $142. Packer margins turned positive and the weekly slaughter at 645,000 cattle reflected improved demand for beef. Choice-select spreads are expected to widen into the spring. This spread could be accelerated by cattle feeders who choose to market cattle at earlier and lighter weights. All meat production is running 9% above last year¾a big number.
Feeder cattle continue to sell discount to the spot futures contract. Light cattle are stronger as stocker operations get ready for summer grazing. Bids for heavier cattle softened. Cash prices for replacement cattle are lagging the futures. A 750-pound feeder steer in the southern plains was quoted at $96.
Corn contracts traded lower in late week trading. A decline in cattle on feed, pork and poultry production will trim corn usage. Current quotes on the southern plains are 60 over May contract. Corn is now pricing into most rations at $11.50 per hundredweight.
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