December 3, 2007

US feeder cattle demand improves, weaned calves market active

The US steer and heifer calves sold last week mostly firm to 5.00 higher, with several markets reporting light weight calves under 450 pounds or 5.00 to 10.00 higher from the previous week, according to Cattle Network. 

Yearlings sold mostly steady with instances up to 3.00 higher. In the southeast most sales were reported steady to 4.00 higher.  

Much improved demand for calves were registered last week as harvest is complete and colder temperatures has allowed farmer feeders and feedlots to focus on long timed weaned calves and yearlings. Quality on many auctions was reported to be very good and attractive on these weaned calves and yearlings intensifying demand.  Feedlot trade developed earlier than expected this Wednesday with live cattle futures sharply lower which may have been the catalyst. 

Trade occurred without sacrificing prices at steady money with last week at 95.00-95.50. This is the time of year, during the Holiday season that demand has a tendency to boost prices on meat products and can serve as gauge of things to come. Due to a much higher pork and poultry production, meat supplies are higher than they were a year ago. Retail meat prices for pork and chicken has been readily available at attractive prices in recent weeks, but sound wholesale beef demand for Box Beef remains over 150.00 for choice carcass. 

Surge in pork production this fall is likely as it has had a major impact on meat supplies. Hog slaughter was over 2 million head for the Thanksgiving Holiday shortened week and total hog slaughter is over 1.2 million head ahead of last year since October 1st. 

Grain trade was mostly wheat centred this week as wheat assumed full leadership as prices were sharply higher gaining over 50 cents a bushel. 

Export demand remains strong along with corn as there is concern of dry weather in the southwest US and the wheat crop in Argentina is of concern due to recent frost concerns. There is a concern of old crop supplies and increasing number of end users which could give a strong support to the corn market and with the US dollar remaining weak may encourage exports of grain.