May 5, 2010

US beef exports and stock market rise, hogs fall

US cattle futures gained higher in reaction to another week of abundant beef exports and a much higher stock market while hog tumbled as traders sold after USDA quoted lower cash hogs in the Iowa/Minnesota market.

In cattle, traders were cheered by a Thursday (Apr 29) morning USDA report showing 17,900 tonnes of beef were sold for export last week. That is up 51% from the prior four-week average. The week before, 20,300 tonnes was sold for export, the second highest since late 2003 when exports were virtually shut down after the first US case of mad cow disease.

While the current pace may be exceeding expectations, USDA has forecasted better beef exports this year, estimating 2010 sales at 2.05 billion lbs, up nearly 10% from 2009.

The better exports were attributed to tight supplies of beef around the world and to improving global economies.

"The world economy is recovering and consumers are feeling more prosperous and want to eat more beef," said Ron Plain, economist at the University of Missouri.

News of steady cash cattle sales in Nebraska at US$158 per cwt on a dressed basis also appeared to fuel buying in cattle futures, said Short.

Feeder cattle futures moved higher with live cattle, despite early pressure from double-digit gains in the corn market. Corn prices later moderated but still finished higher.