John Nelson Cattle
Outlook
Producers
Commodities –
August 19, 2008
LIVESTOCK MARKETING RECOMMENDATIONS
We currently have recommended hedges covering from 50-75% of expected marketings through February of next year. It is a little early to push the panic button further out, so we would hold off with April & June hedging for now.
LIVESTOCK FUNDAMENTAL COMMENTS
We’ve gotten back in the pattern of trading cattle late in the week, with southern yards selling on Friday at mostly $100.00, steady with the previous week, while their northern counterparts sold from $159-160 in the beef, steady with last weeks’ sales. Decent numbers were moved, even though prices paid didn’t match expectations from earlier in the week. Estimated show lists for this week are slightly larger in the south and considerably smaller in the north, leaving numbers at about the same from the previous week. Boxed beef demand continues to hold together, with good improvement reported from the export trade. This is helping hold packer margins together, now at an estimated positive $22.35 per head. Weights did increase last week, which should be the seasonal tendency into the 4th quarter, as cattle get more days on feed in good feeding conditions. This week, the USDA will issue its’ August 1 On Feed Report. Early estimates have on-feed numbers at 96.7% of year-ago levels, July placements at 108.6% and July marketings at 101.9%. These numbers might be slightly bearish for deferred futures, due to the increase in placements.
USDA STATS
Last weeks’ kill of 682,000 hd. was up 2% from the previous
week and up 2 ˝% from the same week last year.
Average carcass weights gained 5 lbs. last week to 782 lbs.,
compared to 787 lbs. last year. Live
weights put on 3 lbs. last week to 1279 lbs., vs. 1279 lbs. last year.
Total beef production last week was up 2 ˝% from the
previous week and up 1 ˝% from the same week last year.
Boxed beef prices firmed up last week, with the choice box gaining $1.25/cwt. to $164.29 on just average movement.
