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Friday, December 29, 2017

Friday Midday Livestock Market Update - Buyer Support Redevelops Late Friday

GENERAL COMMENTS: 
Moderate price support has trickled into the livestock complex following lackluster early trade Friday morning. The overall tone of the market remains firm, although the attention of traders is set on position taking at the end of the year. This could leave prices choppy through the rest of the session in all markets. Corn prices are lower in light trade. March corn futures are 1 cent lower Thursday. Stock markets are lower in light trade. The Dow Jones is 18 points lower while Nasdaq is down 11 points.
LIVE CATTLE:
Following what has been a very sluggish trading session Friday morning, renewed buyer support moved back into the market. This allowed for traders to focus on pushing prices mostly higher as current markets are holding mixed trade from 30 cents lower to $1 per cwt higher. Front month December contracts continue to lead the market higher, although the overall tone of the complex is sluggish as traders are trying to roll contracts to February or April contract months. Light trade is expected to remain through the rest of the session, although support in beef values is helping to sustain the renewed buyer activity. Cash cattle activity still remains generally subdued Friday morning although bids have increased through the morning. Bids are now seen in all areas, although at this point there is a wide gap between current bids and asking prices, and it could be late Friday before a balance is found. This could limit overall early day activity and essentially allow trade to take place in one swoop through the end of the day. Bids are seen at $119 live and $190 to $191 dressed. Asking prices remain firmly at $125 to $126 live basis, and $195 and higher dressed. Boxed Beef cut-outs at midday are higher, $1.29 higher (select) and up $1.01 per cwt (choice) with light movement of 43 total loads reported (27 loads of choice cuts, 12 loads of select cuts, 1 load of trimmings, 3 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have bounced higher at midday after posting moderate to firm losses through the entire morning. The overall lack of trade volume and traders interest in squaring positions ahead of year end is allowing for the late day market shift. Very little additional technical or fundamental market direction is developing allowing prices to shift in the moderate range based solely on overall trade interaction late in the day Friday. Traders will remain out of the market until Tuesday when they will start the 2018 year although the overall tone of the market is not likely to change significantly over the next couple of weeks.
LEAN HOGS:
Firm gains seen early in the session have started to slow slightly at midday with prices mixed from 2 cents lower to 30 cents higher. The overall tone of the market remains firm, but the overall lack of trade interest moving into the market late Friday is allowing traders to focus on position taking opportunities. This could limit additional market direction through the rest of the session and allow for generally stable prices going into the weekend. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.53 at $58.46 per cwt with the range from $57.50 to $58.73 on 4,341 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 162 loads selling with carcass values gaining $0.23 per cwt. Lean hog index for 12/27 is at $61.58 down $0.01 with a projected two-day index of $61.72, up $0.14.

Friday Morning Livestock Market Summary - Final 2017 Session Likely to Open With Firm Livestock Prices

GENERAL COMMENTS:
Even though cattle buyers probably came into the final week of the year with a smaller shopping list, they still had some basic slaughter needs to cover. Obviously, they're running out of time to complete these limited chores. Look for light to moderate trading to surface sometime Friday late morning. Recent board strength and the softening basis have made feedlot managers tough to deal with, pricing showlists with firmer and firmer hands. Look for asking prices to be restated this morning around $124 to $125 in the South and $195 to $198 in the North. Live and feeder futures should open at least moderately higher thanks to follow-through buying and cash optimism.
Hog buyers are expected to wrap up the year's businessFriday with cash bids steady to $1 higher than Thursday. Receipts have been relatively light this week, but it is difficult to say if smaller runs are tied to cold weather, a real tightening of seasonal numbers, or just late-year apathy. At any rate, some plants stilll need to fill space in the large Saturday kill schedule. Look for lean futures to open moderately higher as well, supported by residual buying and firming carcss value.
BULL SIDEBEAR SIDE
1)For the week ended Dec. 16, fed cattle carcass weights declined: all steers averaged 902 pounds, 2 pounds lighter than the week before and 6pounds smaller than 2016; all heifers averaged 842 pounds, 2 pounds below the prior week and just 1pound heavier than the year before.1)Between the evaporation of premiums and further evidence of long liquidation in open interest this week, February and April live cattle futures seem to be signaling both supply and demand caution for the first third of 2018.
2)Boxed beef firmed furtherThursday with cutouts quoted moderately higher. At least a few accounts seem to be anticipating better demand after the first of the year.2)More specifically, February through June live futures remain corralled by tough oversold chart resistance. Indeed, it would take a strong rally Friday to even challenge 40-day moving averages basis February and April (i.e., 123.50 and 124.10, respectively).
3)The pork cutout jumped more than a dollar higher on Thursday, powered by better demand for bellies and loins.3)For the week ended Dec. 23, U.S. hatcheries set 228 million broiler eggs in incubators, up 4% from a year ago. At the same time, chicks placed totaled 186 million, also up 4% from 2016.
4)Ambitious Saturday kill plans are now privately estimated to total 385,000 hogs or better, surely reflecting positive and encouraging pork processing margins.4)For what it's worth, the seasonal tendency for lean hog futures is for lower prices the nextfour to sixweeks.

OTHER MARKET SENSITIVE NEWS
CATTLE: (Ag Web) -- Demand has proven the key to holding livestock markets in the black during 2017.
Despite increasing beef production, cattle feeders experienced a booming market last spring that padded closeouts at times in excess of $400 per head. Demand, industry analysts say, was the driving force that kept pulling cattle forward and in the process a steep decline in carcass weights.
That windfall for feedyards fueled the desire for replacement cattle, supporting prices for feeder cattle and calves at unanticipated levels.
"Strong demand for beef kept pulling cattle forward, and feedyards had the incentive to bid up replacements," says Sterling Marketing president John Nalvika. "That put a lot of dollars in ranchers pockets for feeder cattle that we didn't think would be there at the beginning of the year."
Now the question on rancher's minds is, "Can demand continue to support the growing supplies?"
The short answer is, "Yes, but probably not without a modest decline in prices."
Price risk is always possible, but analysts say risk and volatility is reduced at this point in the cattle cycle. That's because prices are well below the peaks of a couple years ago, and market fundamentals have replaced much of the market's emotion.
Generally, analysts expect 2018 cattle prices will be somewhat lower on an average basis than in 2017. That's due to further increases in supply of beef and all proteins.
"In four short years, we've seen total red meat and poultry supplies increase 10%, recovering from the drought-fueled low set in 2014," Nalivka says. He projects per capita red meat and poultry supplies will near 222 pounds in 2018, or 20 pounds more than the low of 202 pounds in 2014.
Specifically to beef, feeder cattle numbers will be up for the third consecutive year, on-feed numbers will increase and total beef production is projected to jump another 4% in 2018 to record highs.
"We are still in the stage of the cattle cycle where supplies are going to get larger for another two or three years," CattleFax CEO Randy Blach told cattlemen at the National Angus Convention. But, he noted, the cattle industry has navigated those hurdles well.
"We've got everything going our way - exports are better than anticipated, domestic demand has been good, consumer spending and consumer attitudes have all been very positive - but it doesn't take much and we could start to move back the other way."
Blach told attendees at the Kansas Livestock Association convention that increasing domestic household income and growing consumer confidence has led to the highest-quality beef supply in decades.
"The Prime-Choice spread has stayed at very large levels despite the increase in supply," he said. "That's demand. That's the market telling us they want more of the good stuff."
Although the demand picture is positive, Blach said feeder cattle prices will stay flat, ranging from $135 to $160/cwt in 2018. He anticipates modest, yet solid profit margins in the calf market.
Maintaining a strong export market for beef will be critical for domestic prices in 2018.
"Demand surpassed expectations in 2017," Nalivka says. "Retail beef prices in 2017 were 10 cents cheaper while per capita consumption was increasing 1.5 pounds. That's excellent demand."
And a 12% gain in U.S. beef exports in 2017 shows robust demand, especially following a 13% gain in 2016.
"Exports amounted to 11% of production in 2017," Nalivka says. "I project we'll see another 4% gain in exports in 2018, which will be record high. It would mean we're exporting 3 billion pounds of mostly high-value beef."
HOGS: (Hoosier Ag Today) -- Efforts by the U.S. and South Korea are moving ahead to modernize the 2011 Korea-U.S. Free Trade Agreement, KORUS, a key trade agreement for the U.S. pork and beef industries. The South Korean government sent its parliament a plan to renegotiate KORUS and announced it's ready to start talks. The White House must tell Congress it plans to launch the talks, hold two public hearings, and disclose its negotiating goals 30-days before talks begin.
The U.S. pork and beef industries are watching KORUS developments closely, concerned as with NAFTA, that producers could lose existing tariff gains if U.S. negotiators bargain ag for manufacturing wins, or even abandon KORUS.
"We have seen our exports to South Korea go up," says National Pork Producer's spokesman Dave Warner. "Las year we sold $365 million worth of pork to South Korea, making it the number 5 foreign destination for U.S. pork."
That provides a big market for high-value internal organ cuts not eaten much in the U.S. American beef sales in number-two buyer Korea were up more than 80-percent to around one billion dollars, as tariffs move to zero over 10-years. Warner says the US needs more, not fewer trade agreements…tape
"The US pork industry is kind of the poster child for that. We sell more pork to the twenty countries with which the United States has free trade agreements, than we do to the rest of the world combined. So, obviously free trade agreements work."
Agriculture is a U.S. economic sector that, unlike most others, has a foreign trade surplus. The challenge, of course, is convincing the White House to protect tariff gains, at a time when actual or possible losses in NAFTA or the U.S. TPP pull-out are foremost on producers' minds.
Final 2017 session likely to open with firm livestock prices
Summary: Late week cattle futures should open at least moderately higher this morning, supported by residual buying interest and ideas of greater packer spending in the country. Lean hog contracts are also likely to open with a firm undertone thanks stronger carcass value and end-of-year short covering.
Cattle: Steady-$2 HR Futures: 50-100 HR Live Equiv $135.28 + .43 *
Hogs: Steady-$1 HR Futures: 50-100 HR Lean Equiv $83.31 + $1.01**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
General Comments: Even though cattle buyers probably came into the final week of the year with a smaller shopping list, they still had some basic slaughter needs to cover. Obviously, they're running out of time to complete these limited chores. Look for light to moderate trading to surface sometime today between late morning. Recent board strength and the softening basis have made feedlot managers tough to deal with, pricing showlists with firmer and firmer hands. Look for asking prices to restated this morning around $124-125 in the South and $195-198 in the North. Live and feeder futures should open at least moderately higher thanks to follow-through buying and cash optimism.
Hog buyers are expected to wrap-up the year's business this morning with cash bids steady to $1 higher than Thursday. Receipts have been relatively light this week, but it difficult to say if smaller runs are tied to cold weather, a real tightening of seasonal numbers, or just late year apathy. At any rate, some plants stilll need to fill space in the large Saturday kill schedule. Look for lean futures to open moderately higher as well, supported by residual buying and firming carcss value.
Bullish
For the week ending December 16, fed cattle carcass weights declined: all steers averaged 902 pounds, 2 pounds lighter than the week before and 6 pounds smaller than 2016; all heifers averaged 842 pounds, 2 pounds below the prior week and just 1 pounds heavier than the year before.
Boxed beef firmed further yesterday with cut-outs quoted moderately higher. At least a few accounts seem to be anticipating better demand after the first of the year.
The pork cut-out jumped more than a dollar higher on Thursday, powered by better demand for bellies and loins.
Ambitious Saturday kill plans are now privately estimated to total 385,000 hogs or better, surely reflecting positive and encouraging pork processing margins.
Bearish
Between the evaporation of premiums and further evident of long liquidation in open interest this week, Feb and April live cattle futures seem to be signaling both supply and demand caution for the first third of 2018.
More specifically, Feb through June live futures remain corralled by tough over chart resistance. Indeed, it would take a strong rally today to even challenge 40-day moving averages basis Feb and April (i.e., 123.50 and 124.10, respectively).
For the week ending December 23, U.S. hatcheries set 228 million broiler eggs in incubators, up 4 percent from a year ago. At the same time, chicks placed totaled 186 million, also up 4 percent from 2016.
For what it's worth, the seasonal tendency for lean hog futures is for lower prices the next 4-6 weeks.
OTHER MARKET SENSITIVE NEWS
CATTLE: (Ag Web) -- Demand has proven the key to holding livestock markets in the black during 2017.
Despite increasing beef production, cattle feeders experienced a booming market last spring that padded closeouts at times in excess of $400 per head. Demand, industry analysts say, was the driving force that kept pulling cattle forward and in the process a steep decline in carcass weights.
That windfall for feedyards fueled the desire for replacement cattle, supporting prices for feeder cattle and calves at unanticipated levels.
"Strong demand for beef kept pulling cattle forward, and feedyards had the incentive to bid up replacements," says Sterling Marketing president John Nalvika. "That put a lot of dollars in ranchers pockets for feeder cattle that we didn't think would be there at the beginning of the year."
Now the question on rancher's minds is, "Can demand continue to support the growing supplies?"
The short answer is, "Yes, but probably not without a modest decline in prices."
Price risk is always possible, but analysts say risk and volatility is reduced at this point in the cattle cycle. That's because prices are well below the peaks of a couple years ago, and market fundamentals have replaced much of the market's emotion.
Generally, analysts expect 2018 cattle prices will be somewhat lower on an average basis than in 2017. That's due to further increases in supply of beef and all proteins.
"In four short years, we've seen total red meat and poultry supplies increase 10%, recovering from the drought-fueled low set in 2014," Nalivka says. He projects per capita red meat and poultry supplies will near 222 pounds in 2018, or 20 pounds more than the low of 202 pounds in 2014.
Specifically to beef, feeder cattle numbers will be up for the third consecutive year, on-feed numbers will increase and total beef production is projected to jump another 4% in 2018 to record highs.
"We are still in the stage of the cattle cycle where supplies are going to get larger for another two or three years," CattleFax CEO Randy Blach told cattlemen at the National Angus Convention. But, he noted, the cattle industry has navigated those hurdles well.
"We've got everything going our way - exports are better than anticipated, domestic demand has been good, consumer spending and consumer attitudes have all been very positive - but it doesn't take much and we could start to move back the other way."
Blach told attendees at the Kansas Livestock Association convention that increasing domestic household income and growing consumer confidence has led to the highest-quality beef supply in decades.
"The Prime-Choice spread has stayed at very large levels despite the increase in supply," he said. "That's demand. That's the market telling us they want more of the good stuff."
Although the demand picture is positive, Blach said feeder cattle prices will stay flat, ranging from $135 to $160/cwt in 2018. He anticipates modest, yet solid profit margins in the calf market.
Maintaining a strong export market for beef will be critical for domestic prices in 2018.
"Demand surpassed expectations in 2017," Nalivka says. "Retail beef prices in 2017 were 10 cents cheaper while per capita consumption was increasing 1.5 pounds. That's excellent demand."
And a 12% gain in U.S. beef exports in 2017 shows robust demand, especially following a 13% gain in 2016.
"Exports amounted to 11% of production in 2017," Nalivka says. "I project we'll see another 4% gain in exports in 2018, which will be record high. It would mean we're exporting 3 billion pounds of mostly high-value beef."
HOGS: (Hoosier Ag Today) -- Efforts by the U.S. and South Korea are moving ahead to modernize the 2011 Korea-U.S. Free Trade Agreement, KORUS, a key trade agreement for the U.S. pork and beef industries. The South Korean government sent its parliament a plan to renegotiate KORUS and announced it's ready to start talks. The White House must tell Congress it plans to launch the talks, hold two public hearings, and disclose its negotiating goals 30-days before talks begin.
The U.S. pork and beef industries are watching KORUS developments closely, concerned as with NAFTA, that producers could lose existing tariff gains if U.S. negotiators bargain ag for manufacturing wins, or even abandon KORUS.
"We have seen our exports to South Korea go up," says National Pork Producer's spokesman Dave Warner. "Las year we sold $365 million worth of pork to South Korea, making it the number 5 foreign destination for U.S. pork."
That provides a big market for high-value internal organ cuts not eaten much in the U.S. American beef sales in number-two buyer Korea were up more than 80-percent to around one billion dollars, as tariffs move to zero over 10-years. Warner says the US needs more, not fewer trade agreements…tape
"The US pork industry is kind of the poster child for that. We sell more pork to the twenty countries with which the United States has free trade agreements, than we do to the rest of the world combined. So, obviously free trade agreements work."
Agriculture is a U.S. economic sector that, unlike most others, has a foreign trade surplus. The challenge, of course, is convincing the White House to protect tariff gains, at a time when actual or possible losses in NAFTA or the U.S. TPP pull-out are foremost on producers' minds.

Thursday, December 28, 2017

Thursday Closing Livestock Market Summary - Live Cattle Paper Leads Meat Futures Higher

GENERAL COMMENTS
The cash cattle market constituted a dead zone with poorly defined bids and asking prices separated by as much as $6-$7 on a live basis. Understandably, the value assessment of feedlots rose through the day as the live board steadily rallied. According to the closing report, the national hog base is $0.61 higher ($53-$59, weighted average $57.95). Corn futures drifted 1-2 cents lower, pretty much stuck in the same sad range it's shambled through since mid-November. The stock market closed higher with the Dow up 63 points and the Nasdaq positive by 10.
LIVE CATTLE
Live issues closed impressively higher, up 37 to 252, supported by late-year short-covering and cash optimism. Expiring December went off the board Thursday at $124.55 (up $2.52), its best finish since Nov. 7. New spot February will take the point Friday more than 200 behind the last stretch made by December. Feb and April now face overhead resistance near 40-day moving averages (i.e., $123.50 and $124.10, respectively). Beef cut-outs: higher, up $0.49 (select: $190.91) to $0.68 (choice: $202.28) with light-to-moderate demand and moderate offerings (89 loads of choice cuts, 34 loads of select cuts, 14 loads of trimmings, 13 loads of ground beef).
FRIDAY'S CASH CATTLE CALL:
Steady to $2 higher. With 2017 running out of rope and short-bought packers running out of cattle, buyers will have to find a way to pry at least moderate numbers away from bullish-minded feedlots on Friday. That probably means higher bids at some point.
FEEDER CATTLE:
Feeders settled moderately higher, but once again following live futures at a slower pace. While January and March have bounced off pre-Christmas lows, nearbys remain trapped between moving average lows and moving average highs. CME cash feeder index: 12/27: $145.88, off $2.68.
LEAN HOGS:
Lean contracts closed moderately higher, supported by firmness in the cash and product markets. Technical-buying interest also seemed helpful. Summer contracts will move into the last trading day of the calendar year within striking distance of new contract highs. The carcass value jumped more than a buck higher thanks to the help of firming belly (up $6.13) and loin (up $2.53) sales. Pork cut-out: $77.23, off $0.02. CME cash lean index for 12/26: $61.59, off $0.03 (DTN Projected lean index for 12/27: $61.58, off $0.01).
FRIDAY'S CASH HOG CALL:
Steady to $1 higher. Staring in the face of ambitious Saturday kill plans (around 385,000 head), some buyers will still be looking for hogs in the morning.

Thursday Midday Livestock Market Summary - Strong Gains Move Back Into Live Cattle Futures

GENERAL COMMENTS: 
Firm gains have quickly developed in cattle trade midday Thursday following lackluster early moves and the potential to limit follow through buyer support through the end of the week. These higher prices could help to spark additional longer-term activity not only through the end of 2017, but carry the momentum well into January. Corn prices are lower in light trade. March corn futures are 3 cents lower Thursday. Stock markets are higher in light trade. The Dow Jones is 30 points higher while Nasdaq is up 7 points.
LIVE CATTLE:
Aggressive buying support first developed in front month December contracts Thursday morning. Although volume remained light and the lightly traded spot month contract brought little overall activity to the market, this set the tone for increased buyer support in all markets. Spring contracts are now trading with triple-digit gains at midday which is helping to draw additional strong buyer support into the entire market. Cash cattle bids have started to develop through the morning Thursday with live cattle bid at $118 per cwt while dressed bids currently stand from $188 to $192 per cwt. The interest still remains generally light, although the support in futures trade could allow for trade to develop before the end of the day. Asking prices remain from $122 to $125 live basis, and $195 and higher dressed. Boxed Beef cut-outs at midday are higher, $0.26 higher (select) and up $0.73 per cwt (choice) with light movement of 81 total loads reported (44 loads of choice cuts, 23 loads of select cuts, 9 loads of trimmings, 5 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have posted strong upward market support midday Thursday following the surge in live cattle futures during the morning. This has allowed for triple-digit gains in most nearby contracts ranging from $1 to $1.50 per cwt. The ability to pull traders back into the market ahead of the holiday weekend could spark some increased strong buyer activity to develop during early January.
LEAN HOGS:
Despite moderate back and forth through the lean hog complex Thursday morning, lean hog futures are mixed in a narrow to moderate range. This overall lack of direction in the market could allow for traders to focus on sluggish market activity through not only the rest of the session but the rest of the week. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.02 at $57.36 per cwt with the range from $54.00 to $58.05 on 4,510 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 142 loads selling with carcass values gaining $0.03 per cwt. Lean hog index for 12/26 is at $61.59 down $0.03 with a projected two-day index of $61.58, down $0.01.

Thursday Morning Livestock Market Update - Livestock Futures Ready for Mixed Opening

GENERAL COMMENTS:
Cattle buying interest should start to take some formThursday morning. Yet it's a good bet that opening bids will remain far below asking prices of $124-plus in the South and $195-plus in the North. Accordingly, significant trade volume could be delayed until sometime Friday, especially if the board remains relatively firm. Live and feeder futures should start out with mixed prices as specs and comercials cautiously posture before the development of cash news.
Late-year cash firmed somewhat Wednesday with moving country receipts no better than moderate. Such buying interest is expected to increase Thursday with bids rangng from steady to $1 higher. As expected, Saturday's kill is set to be a large one as processors move to make up for lost time. Look for the weekend slaughter to total close to 385,000 head. Expect lean futures to open narrowly mixed with slow trade volume.
BULL SIDEBEAR SIDE
1)Out-front (with delivery of 22 days or more) boxed beef sales surged over 1,200 loads last week. Early-year demand may be already showing legs.1)Beef cut-outs closed solidly lower at midweek, suggesting that retailers and food mangers will remain cautious buyers until at least after New Years.
2)A seasonal top in cattle carcass weights should be close at hand wiith the fall-out possibly accelerated by bitter cold winter temps.2)Spot Dec live is at modest premiums to Feb and Apr, suggesting limited upside potential in the cattle market going into the early part of 2018 and should encourage producers to remain current in their marketings.
3)The pork carcass value closed moderately higher on Wednesday, supported by better demand from all primals except the picnic and butt.3)For the week ended December 23, Iowa barrows and gilts averaged 285.1 pounds, 0.1 pound heavier than the previous week. Yet the big news remains the fact the total towers 5.9 pounds greater than 2016.
4)Since February lean hogs futures assumed spot contract status last week, both the short and long-term trends remain positive.4)The February lean hog contract finished the the midweek session 50 points lower at $71.03, a 945-point premium to the late cash index. Such a lead may proved to be justified, but it's not likely to get much larger until the cash market shows more life.
OTHER MARKET SENSITIVE NEWS
CATTLE: (Oklahoma Farm Report) -- After an extensive search, the Cattlemen's Beef Promotion & Research Board (CBB) has named Scott Stuart of Colorado as the new chief executive officer, effective February 1, 2018.
Stuart has an extensive background in the livestock industry, including board management and as a contractor to the beef board. He currently serves as the President and CEO of the National Livestock Producers Association (NLPA), which comprises several regional livestock marketing cooperatives marketing over 2.5 million cattle annually. In his first few months at the CBB, Stuart says he wants to spend some time getting acquainted with the organization and its people.
"I want to get to know the leaders very well and know what gets them up in the morning, what their motivation is," he said. "And, I want to know what they truly expect of me. I want people to know me; know I'm fully invested in what I'm doing - know that I'm approachable. And that's from the smallest investment in the Checkoff to the largest."
For Stuart, he says his motivation comes from the inspiring work of the producers that take and make the time, to get involved in the operation and direction of the Beef Checkoff. Those are the people he wants to serve. He says, much like them, he is a producer. He says his best self and best thinking comes when he gets up in the morning to do his chores. He believes such work gets you closer to what life is all about, and the work that sustains his and his colleagues' livelihoods. As he prepares to take on his new role, Stuart has reflected on what lies ahead for him - the challenges that wait to be tackled to make the CBB better than he found it.
"The next five years is not unlike the last five years," Stuart said. "When we're limited on resources, that makes it tougher and tougher. As we go forward, every year gets tougher."
Stuart says he hopes to explore and discuss any and every new way to use the Checkoff's resources more efficiently and stretch what it has to do more. He says the key is keeping producers invested.
HOGS: (KMCH) -- The Iowa Pork Producers Association's 2018 Iowa Pork Congress will be held on Jan. 24 and 25 at the Iowa Events Center in Des Moines.
North America's largest winter swine trade show and conference will feature nine new seminars, a keynote address, 300 exhibitors, training sessions, fun social events and exciting youth activities.
"Pork Congress has something for everyone and it's our hope that attendees will join us and take advantage of the available opportunities," said IPPA President Curtis Meier, a pig farmer from Clarinda.
A strong lineup of free business seminars on the timely subjects and issues of greatest importance to pork producers and the industry will be offered. "Utilizing Livestock Manure in a Cover Crop Program" will be presented by Drs. Dan Anderson and Matt Helmers from Iowa State University; Dr. Steve Meyer will look to the future of prices and profitability; and Erik Potter from ISU will explain how not to fail an audit.
Matt Rush is the former New Mexico Farm Bureau CEO and an award-winning speaker and author. He'll present "There's a snake in my bumper" as the 2018 Iowa Pork Congress keynote speaker. Rush will explain why it's important for farmers to tell the agriculture story and why farmers must be viable, valuable and visible to remain successful. The keynote will be held at 2:15 p.m. on Jan. 24.
Hog farmers also will be able to obtain or renew their PQA Plus® and TQA® certifications, and a certification session for confinement site manure applicators is being offered.
Companies from Iowa, the U.S. and around the world that serve the pork industry will fill the Hy-Vee Hall trade show floor to offer solutions that help pig farmers become more efficient, profitable and successful. IPPA will once again have its booth and the Pork Information Plaza in Hall "A" and be joined by the National Pork Board, National Pork Producers Council, the Coalition to Support Iowa's Farmers, Iowa State University, other affiliated organizations and commercial exhibitors.

Wednesday, December 27, 2017

Wednesday Closing Livestock Market Summary - Livestock Futures Mixed in Sluggish Trade

GENERAL COMMENTS
Cash cattle activity remains at a standstill midweek with bids undeveloped. It is not unexpected that bids have been absent at this point in the week given that Monday was a holiday and overall trade through the week is expected to remain light. But a few token asking prices have been seen in the South with prices of $122 to $125 per hundredweight (cwt). It is likely going to be late Thursday or sometime Friday before active cash trade develops before another long holiday weekend. The Fed Cattle Exchange Auction on Wednesday listed a total of 637 head, with zero actually sold, 637 head listed as unsold, and zero head listed as PO (Passed Offer). The state-by-state breakdown looks like this: KS 160 total head, with zero head sold, 160 head unsold, zero head listed as PO; NE 266 total head, with zero head sold, 266 head unsold, and zero head listed as PO; TX 142 total head, with zero head sold, 142 head unsold, and zero head listed as PO; CO no cattle reported; IA no cattle reported; other states (OK) 69 total head, with zero head sold, 69 head unsold, and zero head listed as PO. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 637 head total, zero head sold; 1-17 day delivery no cattle reported; 10-17 day delivery no cattle reported; 17-30 day delivery no cattle reported. According to the closing report, the national hog base is $0.65 lower compared with the Prior Day settlement ($53.00-$58.50) weighted average $57.29. The corn futures moved higher in light activity. March futures were 1 cent higher Wednesday. The Dow Jones Index is 15 points higher with the Nasdaq up 2 points.
LIVE CATTLE
Mixed trade developed across the complex with traders holding prices in a moderate range ($0.47 lower to $0.52 Higher). Lackluster market activity was seen following strong early morning trade. The inability to hold initial gains left the market generally sluggish, although the recent support in the cattle market has pushed prices well off of early lows and is likely to create additional market activity later in the week. Beef cut-outs: lower, $0.41 lower (select, $190.42) and down $1 (choice, $201.60) with moderate demand and offerings (84 loads of choice cuts, 25 loads of select cuts, 1 load of trimmings, 13 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL:
Steady to $2 higher. Cash activity remains undeveloped and likely will remain that way until late in the week. Early activity Thursday will likely see undeveloped bids with packer interest improving through the day. Firm cash market support may be offset by potentially light trade in front of next week's holiday schedule.
FEEDER CATTLE:
Mixed trade was seen at closing bell as initial buyer support slowly eroded through the session ($0.05 lower to $0.77 higher). Strong triple-digit gains developed early in the session, which set the tone for the higher market support. But the aggressive buying activity was not able to hold through the end of the session as lackluster activity pulled markets lower in spring and summer contract months. Even though January futures were able to lead the market higher with a 77-cent-per-cwt gain, the lack of follow-through support left markets slightly unstable. CME cash feeder index for 12/26 is $148.36 down $0.34.
LEAN HOGS:
Mixed trade developed midweek following early morning support. The overall tone of the market still remains firm, but the lack of interest allowed for falling prices ($0.50 lower to $0.07 higher). There is increased underlying support due to price rallies seen over the last week. This may help to create additional buyer activity in early January as well as sustain additional market support through the rest of the year. Front-month February futures have posted losses of 50 cents per cwt at closing bell, moving back to $71 per cwt, although the rest of spring and summer contracts continue to trade at a significant premium to the spot-month contract. Carcass values firmed as mixed primal values left the overall pork complex generally firm but unable to show significant support. Pork cut-out: $77.02 up $0.54. CME cash lean index for 12/22 $61.62, down $0.14. DTN Projected lean index for 12/26 $61.59, down $0.03.
THURSDAY'S CASH HOG CALL:
Steady to $1 higher. Firm plant buyer support is expected to redevelop through the end of the week with most bids expected to be steady to 50 cents per cwt higher. Even though the strong follow-through support was not seen in futures trade, there seems to be some indication of additional buying activity through the end of the year. This may help to sustain overall support into early January. Plant runs are expected to be at 465,000 Thursday. Saturday runs are expected to be at 385,000 head.

Wednesday Midday Livestock Market Update - Firm Gains in Cattle Trade Draw Buyers Wednesday

GENERAL COMMENTS: 
Firm gains have developed in cattle trade Wednesday morning with follow through support holding prices higher after early week surges. Weakness is seen in lean hog futures as traders remain focused on position taking. Corn prices are higher in light trade. March corn futures are 1 cent higher Wednesday. Stock markets are higher in light trade. The Dow Jones is 21 points higher while Nasdaq is up 2 points.
LIVE CATTLE:
Firm gains are seen in live cattle trade with buyers focusing on the support moving back into feeder cattle trade earlier in the week. The potential to keep prices wll off of recent market lows through the end of the year has helped to not only add to trade activity, but it sparked some interest from commercial and investment buyers at the end of the year. A strong move higher this week is likely to add to early support and could bring buyers back during January. Cash cattle markets remain quiet with just a few asking prices developing in the South through the morning. Asking prices are seen at $122 to $125 per cwt, although bids are undeveloped and likely to remain that way until sometime Thursday. Active trade may not be seen until the end of the week. The Fed Cattle Exchange Auction today listed a total of 637 head, with 0 actually sold, 637 head listed as unsold, and 0 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 160 total head, with 0 head sold, 160 head unsold, 0 head listed as PO; NE 266 total head, with 0 head sold, 266 head unsold, and 0 head listed as PO; TX 142 total head, with 0 head sold, 142 head unsold, and 0 head listed as PO; CO no cattle reported; IA no cattle reported; other states (OK) 69 total head, with 0 head sold, 69 head unsold, and 0 head listed as PO. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 637 head total, 0 head sold; 1-17 day delivery no cattle reported; 10-17 day delivery no cattle reported; 17-30 day delivery no cattle reported. Beef cut-outs at midday are mixed, $0.26 lower (select) and up $0.15 per cwt (choice) with light movement of 74 total loads reported (46 loads of choice cuts, 17 loads of select cuts, no loads of trimmings, 11 loads of ground beef).
FEEDER CATTLE:
Firm gains are seen Wednesday in cattle trade with feeder cattle markets leading the upward market charge at midday. This is helping to draw additional trade activity back to the table through the week. Front month spot contracts are holding gains of 70 cents per cwt as traders continue to focus on increased buyer support in nearby trade. But the overall lack of strong volume seen through the week may limit additional market shifts during the rest of the trading session.
LEAN HOGS:
Losses continue to develop across the lean hog complex Wednesday morning despite the early support that quickly moved into the complex. After posting short term highs in several nearby contracts early in the week, the focus on the market is not turning to position taking as traders try to adjust markets lower. Front month February futures are hardest hit, with a 95 cent per cwt with prices seen at $70.60 per cwt. Light trade is expected to be seen through the end of the session, but the direction of the market is likely to have already been set. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is up $0.40 at $57.04 per cwt with the range from $53.00 to $57.38 on 3,121 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $1.02 at $55.27 per cwt with the range from $53.00 to $56.00 on 396 head reported sold. The National Pork Plant Report posted 255 loads selling with carcass values gaining $0.04 per cwt. Lean hog index for 12/22 is at $61.62 down $0.14 with a projected two-day index of $61.59, down $0.03.

Wednesday Morning Livestock Market Summary - Cattle Futures Staged for Follow-Through Buying on Opening

GENERAL COMMENTS:
Packer inquiry in feedlot country is expected to limited this morning with significant trade volume probably delayed until Thursday and Friday. Beef producers will probably be slow to price cattle thanks to the explosive nature of early-week futures. Live and feeder futures should open at least moderately higher supported by residual buying and signs of technical encouragement.
The cash hog market at midweek should resume this morning with generally steady bids. Expect softness in the cut-out this week, but there seems to be significant support above $75. Lean contracts seem set to open on a mixed basis with spot Feb suuported better than deferreds.
BULL SIDEBEAR SIDE
1)Cattle futures roared back from the Christmas break with triple-digit gains, underscoring the significance of pre-Christmas bottom-building and working to weaken the cash basis (i.e., lending feedlot managers greater leverage).1)According to the DTN placement model, big lots now have 5 percent more steers and heifers scheduled to be marketed through the first quarter of 2018.
2)Beef cut-outs surged sharply higher on Tuesday with early-week movement described as "moderate to good."2)For the week ending December 19, noncommercials continued to liqidated their net-long position in live cattle futures (declining by 7,300 to a total of 103,500 contracts).
3)Bitter cold temperaturs through the tai end of 2017 and into the first few weeks of January means that Old Man Winter has slammed brakes on optimal livestock weight gain and meat production.3)The pork carcass values stumbled into the holiday-shortened week yesterday with softer demand noted for loins, bellies, and hams.
4)Nearby lean hog futures have embraced recent news of the expanding swine herd with alacrity. With spot Feb now nearly $10 over the cash index, the board is clearly fearless in leading the country trade higher over the next several weeks.4)Deferred lean hog futured closed no better than mixed, reflecting a nervousnes tied to the larger than expected farrowing intentions suggested by the Dec 1 released last Friday.
OTHER MARKET SENSITIVE NEWS
CATTLE: (North Texas e-News) -- A patriotic color scheme used in a cattle production system study aims to make cow-calf production more efficient and ultimately produce more pounds of beef with fewer acres, according to researchers.
The project is part of a broader scope of research studies led by Texas A&M AgriLife's Sustainable Solutions for Beef Production Systems.
On a recent visit at the McGregor Research Center, Dr. Jason Sawyer, superintendent, and Barton Johnson, research associate, were working with three sets of cows with one quarter Bos Indicus influence. The cattle donned red, white or blue ear tags to help identify which time of the year they calved or will calve.
"The goal of this project is to develop a system that can achieve a 35 percent improvement in pounds of calf weaned per acre," Sawyer said.
The color tag scheme greatly enhances the ability to track in the field how far along the cows are during the breeding system or if they have failed on the first try to get bred, he said.
The cows with red ear tags calve in January, while the white-tagged group is targeted to calve in May. The blue tag group is expected to calve in September.
"This gives us three calving seasons across the three groups, each 120 days apart," Sawyer said. "We also have the opportunity to manage cows very intensively between weaning and calving, helping to achieve both feed and land use efficiencies."
Visually, the ear color tagging system helps researchers keep track of which cows are expected to calve during the year, Sawyer said. But the tagging system goes one step further.
"If a cow in the red group fails to breed, at the time we determine that failure, she is switched to the white group," Sawyer said. "If she fails there, she has an opportunity to move to the blue group and try again. Every time she fails, she gets a strike. So a red cow that gets a strike becomes a white cow with one X on her tag, so that in the field we can tell at a glance which cow has originated where, their current production status and their status in the system."
Sawyer said this system is designed to allow producers to spread their risk throughout the year, "but more importantly it cuts down on replacement costs by giving her another chance to be productive within four months of her original failure, rather than an entire year, which would be the standard in a normal production system."
He said it also allows them to easily identify cows that failed to catch on the first try, "so that while she remains productive, we will not keep replacement females from those cows."
HOGS: (kticradio.com) -- A Politico report shows just how worried some lawmakers are about the potential failure of the North American Free Trade Agreement negotiations. Officials began talking on Tuesday about putting together a potential bailout of sorts for farmers.
During a conference call Tuesday morning, Iowa Republican Senator Chuck Grassley said he was going to ask U.S. Trade Representative Robert Lighthizer about the rumors in Washington of money being put together and set aside to help farmers in case the NAFTA negotiations fall apart. Grassley says, "I've heard rumors that people in the bureaucracy are trying to anticipate what we are going to do to protect small farmers from drops in prices should the U.S. pull out of NAFTA.
There's some talk going around about potentially putting together a pot of money we could use to support prices in case of a collapse resulting from a NAFTA withdrawal." Grassley says government assistance is the last thing the agriculture industry wants. "Farmers don't want more money from the federal treasury," he adds, "they want their money to come from the marketplace."

Tuesday, December 26, 2017

Tuesday Closing Livestock Market Summary - Meat Futures Ignore Bearish Supply Move With Post-Christmas Rally

GENERAL COMMENTS
Given the holiday-delayed start to the trading week, Tuesday in cattle country was as good as Monday with activity limited to the distribution of new showlists. Ready numbers appear to be generally smaller than last week with only Nebraska offering a few more steers and heifers. According to the closing report, the national hog base is $0.07 higher ($50-$58, weighted average $56.59). Corn futures closed fractionally higher, perhaps firmed a bit from buying in the beans. Yet late-year corn continues to have no direction to speak of. The stock market closed lower with the Dow off 2 points and the Nasdaq down by 23.

LIVE CATTLE
Live contracts closed sharply higher, up 120 to 290 points. Friday's bearish placement number was tossed in the backseat as bulls jumped behind the wheel and stomped on the gas thanks to bitter cold temperatures across much of feeding country and aggressive short-covering. If winter is set to be this harsh, production potential could really be curtailed. Beef cut-outs: sharply higher, up $2.95 (select: $190.83) to $3.04 (choice: $202.60) with moderate to good demand and light to moderate offerings (41 loads of choice cuts, 19 loads of select cuts, 11 loads of trimmings, 16 loads of ground beef).

WEDNESDAY'S CASH CATTLE CALL:
Steady to $2 higher. Although we could start to see a few starter bids at midweek, significant trade volume will probably be delayed until Thursday or Friday.

FEEDER CATTLE:
Following the lead of live contracts, feeders surged 200 to 280 higher. Yet even with Tuesday's pop, feeder charts can't claim much encouragement. Spot March managed to nose above its 8-day moving low on the close, a modest accomplishment if there ever was one. In short, short- and long-term trends here remain quite negative. CME cash feeder index: 12/25: $148.72, off $0.64.

LEAN HOGS:
Nearby contracts scored solid progress with Feb and April settling at the highest marks seen since Dec. 4. It was only several weeks ago that many chart-watching bears expressed confidence that a double top was in place for most 2018 contracts. Suddenly, the tables have turned with talk of double bottoms. The carcass value closed moderately lower, checked by softer demand for loins, bellies and hams. Pork cut-out: $77.23, off $0.02. CME cash lean index for 12/21: $61.76, off $0.24 (DTN Projected lean index for 12/22: $61.62, off $0.14).

WEDNESDAY'S CASH HOG CALL:

Steady. Hog buyers are likely to open with near-steady bids in the morning with late-year supply and demand in pretty good balance.

Cattle on feed rise in November

Placements sharply higher than anticipated.

The latest U.S. Department of Agriculture’s “Cattle on Feed” report showed cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.5 million head on December 1, 2017, an 8% increase from December 1, 2016. Analysts had expected cattle on feed to rise by 7%.

Placements in feedlots during November totaled 2.10 million head, a 14% increase above 2016 and much larger that the trade had anticipated. The pre-report average trade estimate was a 6% increase in November. Net placements were 2.03 million head. During November, placements of cattle and calves weighing less than 600 pounds were 610,000 head, 600-699 pounds were 545,000 head, 700-799 pounds were 455,000 head, 800-899 pounds were 294,000 head, 900-999 pounds were 75,000 head, and 1,000 pounds and greater were 120,000 head.

Marketings of fed cattle during November were 3% above the same period last year at 1.84 million head, which was in line with pre-report estimates. This was the highest for November since the series began in 1996, USDA reported.
Other disappearance totaled 71,000 head during November, 3% above 2016.

Tuesday Morning Livestock Market Summary - Firm Gains Develop in Cattle Futures Early Tuesday

GENERAL COMMENTS

Firm buyer support is slowly but steadily developing in cattle trade early Tuesday morning. This is helping to pull markets away from strong market lows seen last week. The overall lack of follow through pressure seen after losses in the last couple of weeks could help to build additional incentive to stabilize prices. Overall trade through the week is likely to remain sluggish in all markets, but this may still keep markets volatile. Corn futures are lower in light trade. Stock market futures are mixed, Dow Jones is 5 points higher while Nasdaq is down 37 points.

LIVE CATTLE:
Open: Steady to 50 cents higher. Moderate buyer activity is moving into live cattle trade during early week activity. The initial support in the complex is offsetting aggressive pressure seen late last week that continues to shift prices at or below $120 per cwt over the last week. It is uncertain just how much market depth that traders will be able to establish early Tuesday, but the initial move in all nearby contracts has helped to spark additional support through the complex. Cash cattle activity is expected to remain quiet early Tuesday morning as both sides are trying to step back to the plate following the Christmas weekend. The winter blast that has moved through much of the Midwest has created some concern of moving cattle and may limit the activity levels early in the week. Initial inventory and show list distribution will be the main order of business Tuesday with most active trade likely to be pushed to the last half of the week. Open interest Friday added 676 positions (331,025). Spot December lost 434 positions (2,016) and February contracts fell 672 positions (120,608). DTN projected slaughter for Tuesday is 114,000 head.

FEEDER CATTLE:
Open: Steady to 60 cents higher. Light but firm buyer support is slowly stepping back into the feeder cattle complex Tuesday morning. Traders have seemed to take a break from the aggressive triple digit losses seen last week as a combination of short covering and post-holiday commercial support is slowly stepping into the market during Tuesday trade. This could bring additional support back to the market, but given the volatility of the complex. There may be some additional uncertainty over the near future. Cash lean index for 12/21 is listed at $149.92, down 0.28. Open interest Friday lost 413 positions (53,038).

LEAN HOGS:
Open: Mixed. Narrow trade ranges are developing early Tuesday morning as traders step back into the market following the long holiday weekend. The focus on narrow gains in front month February futures is being offset by sluggish 10 to 25 cent per cwt losses in the rest of the complex with trader activity extremely light during the initial minutes of trade. This may limit additional activity through most of the morning. Cash bids are steady to $1 per cwt higher. Most bids are steady to 50 cents higher. Open interest Friday added 1,441 positions (228,854). Spot month February fell 328 positions (86,924) and April added 755 positions (60,697). Cash lean index for 12/21 is $61.76, down 0.24. DTN projected slaughter for Tuesday is 372,000 head.