In this file:


         CME: Minor Changes Made to Beef, Pork Balance Sheets

         CME: Factors Affecting Cattle/Beef Markets



CME: Minor Changes Made to Beef, Pork Balance Sheets


CME Group

via The Cattle Site - 11 April 2019


US - The latest USDA WASDE report offered updated supply/demand projections for grain, livestock and dairy commodities in 2019. The report was viewed as somewhat bearish for grains, especially corn, according to Steiner Consulting Group, DLR Division, Inc.


Larger than expected 1 March corn stocks caused USDA to bump up the season final-ending stocks by 200 million bushels or 11 percent. At this time, USDA is projecting the corn stocks/use ratio for 2018-19 to be about 14 percent compared to 14.5 percent for the previous year.


Higher carryover stocks and expectations for almost 4 million additional acres of corn to be planted this spring imply ample corn supplies in the 2019-20 marketing year. December corn futures were trading above $4/bushel at the start of the year but have been trending lower recently. Futures would probably be even lower if not for fears that excessive moisture may interfere with plantings this spring.


USDA made only minor adjustment to soybean and soybean product balance sheets. Soybean meal ending stocks were left unchanged and USDA expects soybean meal exports to be two percent lower than a year ago, but 18.8 percent higher than two years ago.


As for the beef and pork balance sheets USDA made only very minor adjustments despite all the speculation surrounding African Swine Fever and effect this may have on US pork and beef exports in the second half of the year.


It is important to keep in mind that USDA methodology is to only incorporate in their forecasts factors that are already in play. For instance, if a tariff is in place today then USDA assumes it will be in place through the end of the year.


While there is indeed a big potential for US pork exports in 2019, at this time USDA is waiting for trade to develop before making any significant adjustments to their pork export forecasts. According to USDA, pork production in 2019 is forecast to be 27.339 billion pounds, 105 million pounds or 0.4 percent lower than the forecast presented in March but still 3.8 percent higher than a year ago.


USDA noted the slower pace of slaughter and the results of the March Hogs and Pigs report as the main reason for the downward revisions. USDA is currently forecasting pork imports to decline by 37 million pounds or four percent.


For reference, US pork imports as reported by AMS are down about six percent with pork imports from Canada down 19 percent. Strong demand for Canadian pork will limit the amount of pork they send to the US.


Pork imports from Poland are up 13 percent and higher belly prices this summer should result in more Polish pork coming this way. US pork exports are forecast at 6.175 billion pounds, 305 million pounds or 5.2 percent higher than a year ago. This would represent 22.5 percent of US pork production.


Based on these forecasts, USDA is projecting per capita pork disappearance/consumption to be 52.3 lb/pp (retail wt.), 2.8 percent higher than a year ago. Futures markets are clearly pricing much higher exports and a decline in per capita availability for the remainder of the year...


more, including charts [2]



CME: Factors Affecting Cattle/Beef Markets


CME Group

via The Cattle Network - 10 April 2019


US - In this report we make an effort not to make a bullish or bearish argument for the market, which sometimes upsets those that hold a certain view of market conditions, writes Steiner Consulting Group, DLR Division, Inc.


The goal is to outline some of the facts, as we see them, and hopefully spark an idea or two for those willing to look at the data. With that said, below is a brief recap of some factors affecting cattle/beef market:


Weather continues to punish feedlots: Parts of South Dakota are expected to get as much as two feet of snow by Friday. The storm is expected to affect much of the Midwest dumping either snow or rain, with wind gusts in some areas at 50 miles per hour.


In our 5 April report, we noted the higher costs of gain for feedlots in Kansas in February. Conditions in other areas have been even worse and the most recent storm will likely further add to the misery.


Packers holding the line... for now: Fed cattle slaughter last week was estimated at 480,000 head, 1.6 percent lower than the same week a year ago. In the last four weeks, fed cattle slaughter has averaged 481,000 head per week, 1.2 percent higher than the same period a year ago.


Retail and foodservice demand does not start to ramp up until later in April when warm spring weather returns in much of the country. Packers have a few more cattle booked on a forward basis for April delivery, giving them a bit more breathing room in negotiations with feedlots.


Forward booked cattle for April delivery were last reported to be about 40k head bigger than a year ago. But booking cattle forward only goes so far. Ultimately, the price levels packers will pay for cattle will be determined by the supply of cattle on feed and demand at both retail and foodservice.


Beef featuring may not be as strong this spring ...


Packer margins remain in excellent shape ...


Export demand should be good but has not been so far ...


more, including charts [3]