Storm disruptions for livestock market
Cattle traded in moderate volumes last week at mostly $1.00 lower than the previous week, though some cattle sold as much as $2.00 lower. Live trade ranged $104.00 to mostly $105.00 in the south. In the north, live trade was $104.00 with dressed trade at $167-$168. Showlists are expected to be about unchanged this week and ideas are that the market will begin to stabilize after losing $4.00 over the past two weeks.
The choice cutout was down $0.25 at $172.85 Friday night, with the select down $0.86 at $170.75. Spot trade continued light and the total movement of cuts for the week was less than 700 loads. As expected, prices appear to be taking a breather after several weeks of very strong performance. Slaughter picked up last week to 650 thsd head, and we could see buyers try to use the larger production to pressure prices this week.
Friday's Cattle Inventory report showed the nation's beef cow herd down about 2%, about in line with trade expectations. The number of beef heifers held for replacement was down 5%, however, quite a bit less than expected. This implies smaller calf crops over the next two years. The 2010 calf crop was about in line with expectations at 99% of last year. More importantly, however, the number of feeder cattle outside of feedlots was down nearly 3.5%. Cattle have been placed at a very aggressive rate this past fall, partly due to a lack of wheat pasture. That will tighten feeder cattle supplies into the spring especially when the industry would otherwise enjoy an abundance of calves coming off of wheat pasture.
Cash hog calls are steady to $1.00 this morning as a big winter storm begins to roll across the Midwest. The weather service is calling for blizzard conditions and large snow totals into Wednesday. We expect to see slaughter disruptions in the Western Corn Belt as blowing snow closes roads and makes moving hogs difficult. As the storm moves into the Eastern Corn Belt it is expected to bring significant icing, which also will disrupt movement.
The pork cutout gained $0.88 Friday night. Bone-in loins were mostly steady. Butts backed off from their midweek surge, but slaughter disruptions from weather this week and continuing strong export demand should keep that cut firmly priced going forward. Hams are said to be in good shape as are bellies.
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