USA: Cattle market overview for the 8th week of 2022

U.S. suppliers are hoping Chinese importers will buy more U.S. beef after rival supplier Brazil halted shipments to CHINA , REUTERS reported, citing analysts.

Brazil has said it will stop beef exports to China, the main destination for its overseas shipments, after a case of mad cow disease is confirmed. Brazilian Agriculture Minister Carlos Favaro vowed to look into the case with maximum transparency, adding that he hoped the suspension would be lifted next month. In 2021, Brazil suspended exports to China for more than three months after detecting two cases.

“Using history as a guideline, the US is looking to additional beef exports to China over the next three months, and possibly longer if there are more cases in Brazil,” said Jim Gerlach, president of Indiana-based brokerage A/C Trading.

The cattle market is ripe for a correction, brokers said, after futures rallied this month as U.S. cattle supplies dwindled. However, the cattle population looks even smaller than expected as ranchers have reduced their herds due to high feed prices and drought in the western US.

As of Feb. 1, 11.7 million cattle and calves were slaughtered, down 4.1% from a year earlier, according to a monthly report from the United States Department of Agriculture (USDA). Analysts had expected a decline of 3.5%. Feedlot placement of cattle in January was 3.6% lower than a year earlier, according to the USDA. Analysts had expected a fall of 2.9%.

“Cattle declining numbers will be common in 2023 and beyond,” Rabobank said in a note. “The drought and four years of liquidation of the herd have taken their toll.”

Weakly trading February livestock futures edged up 0.050 cents to 165.200 cents a pound after hitting 165.675 cents, the highest on a continuous futures chart since January 2015. The most active April livestock futures closed 0.050 cents higher to set a contract high of 166.400 cents.

Wholesale beef prices have been mixed. “We have noticed that growth in beef sales has slowed down a bit,” said Matt Wiegand, commodities broker FuturesOne.

WEEKLY CUT CHOICE COST

CATTLE SALES

Sale of livestock, heads

Average weight

02/17/2023

24.02.2023

Growth per week,%

02/17/2023

24.02.2023

Growth,%

Bulls (live weight)

13 661

20 150

47.5%

1534

1514

-1.3%

Heifers (live weight)

6 744

7 131

5.7%

1 365

1 352

-1.0%

Bulls (slaughter. weight)

6 688

2136

-68.1%

946

955

1.0%

Heifers (slaughter weight)

1 813

618

-65.9%

837

847

1.2%

WEEKLY WEIGHTED AVERAGE PRICE OF BULLS

BEEF PRODUCTION

Index

8 week

7 week 

8 week 2022

Growth per week,%

Growth per year, %

Slaughter volume

618 000

627 000

651 000

-1.4%

-5.1%

Live weight

1380

1381

1 394

-0.1%

-1.0%

slaughter weight

827

827

843

0.0%

-1.9%

Beef production (million pounds)

509.8

517.5

546.9

-1.5%

-6.8%

CME: Live Cattle Futures

Week 7

Week 8

Growth per week,%

February

163.58

165.20

1.0%

April

164.65

165.38

0.4%

June

160.13

161.08

0.6%

Futures for fattening cattle

March

186.53

189.08

1.4%

April

190.45

193.58

1.6%

May

194.35

198.05

1.9%

You can learn more about the state of the cattle market in the United States (cattle prices, beef prices by category, production dynamics) in the weekly reviews of the MEAT market in RUSSIA and in the world from Meatinfo.ru. Weekly reviews are available free of charge as part of a monthly meat analytics subscription. Russian markets.