The cash cattle trade will step into 2019 in low gear with bids and asking prices poorly defined. Barring major weather events, we suspect the timing of feedlot cash will remain in the Thursday/Friday groove, just as seen through much of the fourth quarter. Live and feeder futures should open moderately higher, supported by recent country strength and signs of beef demand strength.
Hog buyers should begin work Wednesday gathering market inventory with bids steady to $1 lower. Although chain speed is off to another slow start thanks to the holiday, solid processing margins pretty much ensures a large Saturday kill. Lean contracts are geared to open mixed as specs and commercials slowly position around early-year cash potential.
| BULL SIDE | BEAR SIDE | ||
| 1) |
Early signs this week point to strengthening beef demand. Cutouts were quoted significantly higher on Monday with box demand described as "good."
| 1) |
New showlists distributed by feedlot managers on Monday were a good deal larger than last week, especially in Texas and Nebraska.
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| 2) |
The structure of live cattle futures seem bullishly anticipatory. Most actively traded February is about par with the jump in the cash cattle market at the end of last week. This compares with an "average" basis of February being about $1 below cash heading into the new year.
| 2) |
More aggressive meat buying could be further delayed until retail can fully assess holiday clearance. This week will also be on the slow side due to the holiday, before getting into more full production schedules next week and onward.
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| 3) |
Although the spread has narrowed, the market structure of lean hog futures also remains bullish with the large premiums remaining in the spring and summer contracts relative to the cash market and the February issue.
| 3) |
A landmark 11-country trade deal, a revamped version of the Trans-Pacific Partnership (TPP), came into force on Sunday with New Zealand's trade minister hailing the opportunities it presented for exporters. The deal, which will slash tariffs across much of the Asia-Pacific region, does not include the United States after President Trump pulled out of the TPP negotiations in 2017.
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| 4) |
Iowa-Minnesota barrows and gilts for the week ended Dec. 22 showed a slight decrease from the week before, losing 0.4 lb., as forecast, on account of the strong harvest levels that sent some hogs to harvest a little early in anticipation of the holidays.
| 4) |
The seasonal trend is for February hogs to move lower into contract expiration from here.
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CATTLE:OMAHA, Neb. (AP) -- A monthly survey of rural bankers in parts of 10 Plains and Western states suggests the regional economy is growing. The overall index of the Creighton University Rural Mainstreet survey for December climbed back above growth neutral to hit 54.2, compared with 49.9 in November .
Any score above 50 suggests a growing economy in the months ahead, while a score below 50 indicates a shrinking economy.
Creighton University economist Ernie Goss says the surveys over the past several months indicate the regional economy is expanding outside of agriculture.
The survey's confidence index slumped to 44.3 from November's 47.0, and Goss says tariffs, trade tensions and weak agriculture commodity prices harmed the economic outlook of bank CEOs.
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming were surveyed.
HOGS:(FarmJournal's Pork) -- A significant decline in the usage of medically important antibiotics in food production came as no surprise last week in the Food and Drug Administration's report, says Liz Wagstrom, chief veterinarian for the National Pork Producers Council.
Sales and distribution of medically important antimicrobials intended for use in food-producing animals dropped 33% between 2016 and 2017, and a 43% decline since 2015, the peak year for usage.
The 2017 summary report is the first issued since the FDA's new rules on the use of medically important antibiotics in food-animal production were fully implemented. Under Guidance for Industry #213, which went into effect Jan 1, 2017, antibiotics that are important for human medicine can no longer be used for growth promotion or feed efficiency in food animals.
In addition, 95% of the medically important antibiotics used in animal water and feed for therapeutic purposes now require veterinary oversight and can no longer be purchased over the counter.
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| #completeherdhealth |
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