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Daily livestock report apr 10 2013

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Daily livestock report apr 10 2013

  1. 1. Sponsored by Vol. 12, No. 67 / April 10, 2013 The wholesale beef market continues to trade very 000 HEAD US STEER & HEIFER SLAUGHTER, JAN - JUL PRELIMINARY DATA BASED ON DAILY SLAUGHTER ESTIMATES - 7 DAY RUNNING TOTALunsettled at this time and this has so far kept cattle prices 650.0in check. June live cattle prices jumped about 300 points going JAN 11 - JUL 11 JAN 12 - JUL 12 JAN 13 - JUL 13into Easter weekend as market participants thought that the end 600.0of Lent and improving demand going into the grilling seasonwould support higher cattle prices. Futures have drifted lower 550.0following that two day rally and June live cattle futures closedyesterday down 32 points compared to the previous close and near 500.0the contract lows established in late March. One of the main con-cerns in the beef complex remains the ability of retailers and food-service operators to pass on higher prices to the consumer. Also 450.0important, however, is to recognize the damage that slow demandin the first quarter has had on pent up demand, accumulated in- 400.0 New Year Memorial 4th of Julyventories and generally the overall planning process for retailers Dayand foodservice establishments going into the spring. From the 350.0NRA restaurant index to retail food sales to the results of publicly JAN FEB MAR APR MAY JUN JULtraded food companies, there appears to be no argument that busi-ness conditions during the first three months of the year were 50CL FRESH BEEF TRIMMINGS, USDA, WT. AVG., US C/LB.challenging. The lost sales during that period are lost for good. 145Slow sales often lead to backlog in inventories. They also causeend users to adjust lower their projections for sales in the coming 125quarter and thus affect purchasing decisions not just tomorrow 2011but for the next few months. While there is some pent up demand 105from consumers in northern states who have experienced a muchcolder winter and early spring than a year ago, this has to be bal- 85anced with the overhang from weak sales in the previous quarter. 5-Yr Avg. Wholesale beef prices at this point appear to be per- 65forming better than a year ago, in part because of the cut- 2013 2012backs in steer and heifer slaughter. Combined steer and heif- 45er slaughter is currently running at a weekly pace of about 468k/wk, slightly lower than a year ago but the numbers are skewed a 25bit by the holiday shortened weeks and the resulting backlogs.For the period March 4 - April 9, steer and heifer slaughter was Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec2.517 million head, 3.7% lower than the comparable period a yearago (see chart). The choice beef cutout on Tuesday evening was controversy (see chart). More recently, however, the price of fatpegged by USDA at $191.41/cwt., 7.5% higher than a year ago. beef trimmings (which account for as much as 10% of the carcass)The select cutout at $187.02/cwt was 5.4% higher than last year. has moved higher and it currently is close to the levels achieved inThe cutout continues to be supported at this time by items that, in 2011. The surge in the price of fat beef trim is not unusual for thispart, rely on good export business. The chuck primal is currently time of year but it is still surprising as it was assumed the loss ofup 13% from a year ago, the brisket was also up 13% and the short LFTB demand would permanently shift the demand curve lowerplate was up 12%. Middle meats are also higher than a year ago for this product. The cutbacks in steer and heifer slaughter cer-but underperforming the overall gains in the cutout, with the loin tainly are part of the reason for the surge in fat trim values but weprimal up 4.4% and rib up 5.1%. One item that impacts the over- also think that end users came into the spring with lighter thanall carcass but does not show up in the primal values per se is the usual inventories. In all, the improvement in the values of thevalue of the fat beef trimmings. If you remember, last year the 50CL has been positive, the question remains how fat prices willprice of fat beef trimming declined sharply following the LFTB be sustained once the Memorial Day demand dissipates (see chart) The Daily Livestock Report is made possible with support from readers like you. If you enjoy this report, find if valuable and would like to sustain it going forward, consider becoming a contributor. Just go to www.DailyLivestockReport.com to contribute by credit card or send your check to The Daily Livestock Report, P.O. Box 2, Adel, IA 50003. Thank you for your support!The Daily Livestock Report is published by Steve Meyer & Len Steiner, Inc., Adel, IA and Merrimack, NH. To subscribe, support or unsubscribe visit www.dailylivestockreport.com. Copyright © 2013Steve Meyer and Len Steiner, Inc. All rights reserved.The Daily Livestock Report is not owned, controlled, endorsed or sold by CME Group Inc. or its affiliates and CME Group Inc. and its affiliates disclaim any and all responsibility for the informa oncontained herein. CME Group®, CME® and the Globe logo are trademarks of Chicago Mercan le Exchange, Inc.Disclaimer: The Daily Livestock Report is intended solely for informa on purposes and is not to be construed, under any circumstances, by implica on or otherwise, as an offer to sell or a solicita- on to buy or trade any commodi es or securi es whatsoever. Informa on is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied orpossible where projec ons of future condi ons are a empted. Futures trading is not suitable for all investors, and involves the risk of loss. Past results are no indica on of future performance.Futures are a leveraged investment, and because only a percentage of a contract’s value is require to trade, it is possible to lose more than the amount of money ini ally deposited for a futuresposi on. Therefore, traders should only use funds that they can afford to lose without affec ng their lifestyle. And only a por on of those funds should be devoted to any one trade because atrader cannot expect to profit on every trade.

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