Official data released on Thursday showed that January-to-September beef exports totaled nearly 700,000 metric tons, with most of that volume, or nearly 70 per cent, purchased by Chinese buyers.

The next largest foreign buyers by volume were the European Union and then Israel, according to the data.

While grains exports, especially processed soybeans, corn and wheat, are the top farm exports from agricultural powerhouse Argentina, choice cuts of beef have long been coveted by carnivores outside its borders.

The country ships beef to 48 countries, with exports to the United States up 46 per cent compared to the same nine-month period last year, while exports to Chile were up 21 per cent and shipments to Israel up 11 per cent, according to a government statement.

Earlier this year, data showed that domestic beef consumption was down as locals are forced to tighten their belts due to a prolonged economic slump marked by triple-digit inflation and growing poverty.

—Reporting by Maximilian Heath

The post Argentine beef exports hit highest level in more than five decades appeared first on Country Guide.

Feed grains continue to percolate higher; the Canadian dollar is appreciating against the greenback and June live cattle futures are at a $4.50 discount to the April contract. This is not an environment that warrants higher prices for feeder cattle that will come on the fed market during the summer months. Nevertheless, one can’t be narrow-minded.

The overriding factor weighing on prices in 2020 was the COVID pandemic, and vaccine rollouts are becoming more widespread. U.S. consumer incomes will improve with a stimulus package and this could be sufficient to sustain the market until beef demand returns to normal later in February or early March.

Major operations are carrying sufficient numbers for the time being. This sometimes contributes to a softer tone in January. Prior to the Christmas break, medium-frame steers with average flesh levels weighing 800-850 lbs. were quoted from $175 to $180 in southern Alberta; heifers were a solid $13-$16 discount to steers. These cattle are about $10 too high to pencil profitably with the cost per pound gain around $1.25. Calves between 700-850 lbs. will struggle in the short term.

Calves weighing 600-700 lbs. are bought with a time delay factor because these cattle will come on the fed market from September to as late as November. At this stage, 650-lb. steers need to price under $1.90 to be profitable. During mid-December, black steers in Manitoba weighing 680 lbs. were actively moving between $195-$200 in Manitoba; decent steers weighing 650 lbs. in Alberta were trading from $190 to $195. It’s a competitive market, there is no doubt about it. There will be limited slippage on these cattle.

The market may be foreshadowing the environment to come for calves under 600 lbs. Finishing feedlots, backgrounders and those producers looking for grass cattle are all trying to secure ownership of the lighter weight categories. In Alberta, run-of-the-mill steers weighing 550 lbs. are $220, but drop 25 lbs. and the price is up to $240; dropping to 400 lbs., the price increases to the range of $260-$270. Calves from 400 to 500 lbs. are in between $240-$260 and the main point is that buyers feel this is good ownership. The market is telling us in eight months, cattle producers will have forgotten about 2020; uncertainty evaporates in the latter half of 2021.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

The post Klassen: Feeder cattle prices digesting uncertainty appeared first on Country Guide.

Chicago Mercantile Exchange December live cattle futures settled 0.725 cent lower at 107.825 cents/lb., after rising in each the last five sessions (all figures US$).

CME feeder cattle futures closed lower, with the most-active January contract ending down 0.875 cent at 133.175 cents/lb.

“We’ve got a massive night tonight in the election and a lot of uncertainty. Uncertainty is always bearish,” said Scott Varilek, broker at Kooima + Kaemingk Commodities Inc. “I think it’s just a little risk off the table.”

Varilek said the outlook for beef demand remains positive. Wholesale beef prices strengthened for a fourth consecutive day, with choice cuts up 79 cents at $209.44/cwt on Tuesday afternoon and select cuts up $2.83 at $195.45, according to USDA data.

Lean hog futures ended mixed, with the most-active December contact ending down 0.55 cent at 65.4 cents/lb. while back months finished modestly higher.

Fundamentals for pork remain more bearish, according to Varilek, who said seasonal increases in hog slaughter may be offset by continued exports to China.

“We should have a pretty nice supply coming around the corner. But that is yet to be seen,” he said.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.

The post U.S. livestock: Cattle futures trim back on election uncertainty appeared first on Country Guide.

The calf market was quite variable across the Prairies, with limited slippage in Manitoba. We’re seeing more calves come on stream in Alberta, where 40 per cent of the feeder cattle are located.

It’s not uncommon to see Alberta prices trade at a minor discount at this time of year. Feedlot inventories are 17 per cent above the five-year average and pen space is once again becoming an issue. The adverse weather resulted in minor premiums for semi-weaned and weaned calves on some type of health program. Those bawlers coming direct off their mothers were a hard sell. Margins are under water on unhedged cattle and it’s very difficult for the cattle feeder placing cattle in a custom lot. Buyers want these calves a bit cheaper to average out previous purchases.

In central Alberta, a small group of mixed steers weighing 923 lbs. were valued at $165 while tan heifers weighing just over 950 lbs. were quoted at $154. In southern Alberta, larger-frame medium-flesh Angus-blended steers weighing 820 lbs. were quoted at $183 and similar quality heifers averaging 850 lbs. were reported at $159. In central Alberta, black mixed vaccinated age-verified steers with lower flesh weighing just over 800 lbs. were quoted at $182.

In Manitoba, medium- to larger-frame black steers weighing 725 lbs. were quoted at $179 and Charolais-based steers weighing 780 lbs. were reported at $185. In east-central Saskatchewan, mixed larger-frame red steers weighing 720 lbs. were reported at $187.

In southern Alberta, a larger group of semi-weaned Charolais vaccinated age-verified steers weighing 610 lbs. were reported at $192 and similar quality heifers were reported at $179. In Manitoba, a smaller group of red steers averaging 500 lbs. were reported at $215; east of Saskatoon, Angus-based steers just off their mothers averaging 515 lbs. were quoted at $212.

There was still good demand for featherlight calves that will be available for grass next spring. In central Alberta, a small group of silver steers weighing 400 lbs. were reported at $255.

Feeder cattle futures appeared to recover last week with the weaker corn futures; however, there was a widespread selloff in most commodity and financial markets, with all sectors of the economy taking a “risk-off” attitude heading into the U.S. election. COVID-19 cases in Canada and the U.S. continue to rise, which also contributed to the softer tone. Many states and provinces are implementing constraints on restaurants and the size of gatherings in public or at home. Demand uncertainty will continue to weigh on the feeder market in the short term.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

The post Klassen: Feeder market remains under pressure appeared first on Country Guide.

“Unlike previous disease outbreak issues, COVID-19 has not been about food safety or consumer confidence or issues with food products,” Canada Beef president Michael Young said during a recent online town hall.

“Beef demand at retail is up 50 to 70 per cent. Consumers have aggressively stocked up on groceries for home.”

Ground beef is in especially high demand, and many grocers have limited the number of packages that can be purchased at one time.

“It’s too early to know what the impact of COVID-19 will be on retail food prices,” said Young. “What we do know is that the food supply chain is working very hard to keep shelves full.

“Current prices are a reflection of a supply and demand situation, as consumers have been stocking up on food and supplies. This is expected to be short-term as the supply chain will adjust to meet demand and the case of retail purchases normalizes.”

People are also busy searching for recipes and cooking information — with Canada Beef’s website seeing a surge in visitors.

“Canadabeef.ca has seen an increase of 66 per cent total users in March, while Thinkbeef.ca had a 450 per cent increase in visits from February to March,” said Young.

A fact sheet on what the Canadian meat industry has done to protect against COVID-19 has been widely distributed here and abroad, he added.

Most of Canada’s key export markets have been experiencing similar conditions as here, with strong retail demand.

“Many of the markets are making do with dwindling supplies of imported food products, due to the impact of COVID-19 on labour availability at port facilities and transportation,” said Young.

— Alexis Kienlen reports for Alberta Farmer from Edmonton.

The post Beef demand soars as consumers ‘aggressively’ stock up appeared first on Country Guide.

The market is incorporating a risk discount due to uncertainty in beef demand for the second and third quarters of 2020. Feedlot margins are in negative territory by $250-$350 per head. The major problem is in May through July, with feedlot inventories 18 per cent above the five-year average. Alberta packers were buying fed cattle at $141 last week but the April live cattle futures are trading US$10-$15 below the U.S. cash market. Backgrounders are liquidating fall-placed calves and heavier weight categories are moving in line with the fed market. Many producers have held back on sales or taken their feeders totally off grain to limit the weight gain.

In central Alberta, tan steers weighing just over 900 lbs. were quoted at $163; mixed steers weighing 840 lbs. traded for $170 while mixed heifers weighing 830 lbs. were reported at $153. In the Lethbridge area, Charolais blended steers weighing 870 lbs. were valued at $160. Outside the major feeding regions, markets were down more severely. Medium- to larger-frame mixed steers weighing 880 lbs. were valued at $155 in central Saskatchewan.

Prior to this week, calves experienced limited slippage but the absence of the finishing feedlot in the lighter weight categories resulted in the softer tone. October feeder cattle futures are down US$35 from the recent highs; yearling price expectations for the fall period are down $20-$30 from earlier forecasts and the calf and grasser markets are reeling. Markets were variable on similar weight cattle; in some cases, values differentiated by $15 on similar weight cattle. This may have been due to the volatility in feeder cattle futures trading within a US$10 range on certain days.

In southern Alberta, higher quality steers weighing 620-640 lbs. traded from a low of $190 to a high of $200; heifers weighing from 600 to 630 lbs. traded in a range of $160-$172. In the eastern Prairie regions, there were isolated pockets that ignored the coronavirus pandemic. Prices appeared to hold up fairly well on grassers and lighter calves in some areas of Manitoba.

In the short term, there are reports of U.S. and Canadian grocers running low on meat supplies as consumers stock up on food. However, restaurant traffic will be down 30 per cent to as much as 50 per cent over the next month, which is extremely negative for higher-end cuts of beef.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

The post Klassen: Feeder market digesting lower beef demand appeared first on Country Guide.

Hog futures also were sharply lower, sinking to their lowest since October 2018.

All fed cattle contracts and most hog contracts settled down the daily 4.5-cent trading limit. The fed cattle contracts will trade with expanded limits of 6.75 cents on Tuesday, CME Group said.

“The concerns are about restaurant demand and future overall demand,” said Rich Nelson, chief strategist for commodity broker Allendale in Illinois. “Much of the trade still thinks the worst is in front of us.”

The most-active CME May fed cattle futures contract settled down 4.5 cents at 109.975 cents/lb. Fed cattle contracts hit new lows across the board.

CME June live cattle futures were down 4.5 cents at 85.25 cents/lb. Live cattle contracts also hit new lows across the board.

On a continuous basis, the front-month live cattle contract hit its lowest since July 2010 and front-month fed cattle hit its lowest since October 2010.

CME April lean hog futures dropped 2.4 cents to 53.975 cents/lb.

“Food service, institutional (schools), and travel demand is in freefall, while we see pics of cleaned out meat counters in grocery stores,” INTL FCSTone said in a note to clients. “It’s a massive rerouting of demand.”

— Mark Weinraub is a Reuters commodities correspondent in Chicago.

The post U.S. livestock: Cattle futures hit 10-year lows appeared first on Country Guide.

Favourable weather contributed to higher auction market volumes over the past week. Steady demand was noted for grassers but the market had limited upside once the buying crowd switched over for feedlot placement. Many ranchers are running low on feed at this time of year, forcing some to bring cattle to market. This usually results in variable calf quality. Feedlot shopping lists included some type of pre-conditioning with weaning of 30-60 days earlier. Backgrounding buyers are on the sidelines and feedlots want cattle that will perform from Day One without extensive care and attention. At the same time, silage supplies are considered tight in some areas of Alberta and some feedlots can’t bring in cattle that won’t be on full feed in short order. Buying interest for yearlings was sluggish. According to market comments, yearlings are carrying heavier flesh levels this winter and feedlots are on the defensive with the recent slide in the fed market.

In central Alberta, Simmental-cross steers averaging just over 810 lbs. on light grain diet weaned last fall with full shots dropped the gavel at $184; Charolais-blended heifers averaging 835 lbs. backgrounded with silage only with full shots carrying low flesh reportedly sold for $165.

In eastern Alberta, Angus-blended steers weighing just under 500 lbs. reached up to $245 while their older brothers averaging 550 lbs. were quoted at $234. In southeastern Saskatchewan, mixed steers weighing 530 lbs. reached up to $238 while mixed red heifers weighing 510 lbs. reached up to $199. A group of exotic heifers averaging just over 500 lbs. were valued at $203 landed in southern Alberta feedlot.

Alberta packers were buying fed cattle on a live basis in the range of $152-$155, down from last week’s range of $157-$158. Feeding margins have slipped into negative territory by $60-$80 per head. There is a serious concern over exports into Southeast Asia due to the novel coronavirus outbreak. If earlier beef export projections don’t come to fruition, the fed cattle market will have serious downside; therefore, feedlot operators are factoring in a risk discount on yearlings.

— Jerry Klassen manages the Canadian office of Swiss-based grain trader GAP SA Grains and Produits Ltd. and is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

The post Klassen: Uncertain beef demand weighs on feeder market appeared first on Country Guide.

While the virus adds an extra layer of uncertainty to the North American cattle market, expectations for solid beef demand should remain supportive for prices overall, according to an analyst.

“There’s a ton of uncertainty,” said Brian Perillat, senior market analyst with Canfax, noting it’s still too early to know what the impact of the virus and related quarantines will mean for demand.

While any reduction in Chinese demand would have a global economic impact, Perillat noted the country “still has a huge deficit for meat — and that won’t change.”

The African swine fever outbreaks that decimated China’s hog herd over the past year and resulting shortage of pork should bode well for North American meat exports, according to Perillat.

Australia was already selling more beef into China, which was cutting into Australian sales to North America and contributing to higher world prices, he said.

The recently signed Phase One trade deal between the U.S. and China also opens the door to some opportunities. While Canadian beef may not benefit directly from a U.S/China deal, “if they can ship more product and their demand for cattle goes up that’s good for all of Canada and the U.S.,” said Perillat.

“For the most part, there’s a pretty positive outlook for cattle and meat demand,” he said, adding that prices were generally better to start 2020 than they were at any time in 2019.

However, prices typically come under pressure at this time of year due to seasonal trends. The latest coronavirus concern could eventually send prices below year-ago levels.

The U.S. has increased its cow numbers substantially over the past five years, but that trend is coming to an end, according to Perillat.

Both the U.S. and Canada were still putting more cattle on feed — especially heifers due to the slowdown in building the cow herd. Those feeders will take some time to work through the market, he said.

The Canadian dollar remains another background factor that could influence prices. Perillat said a currency in the 74- to 77-U.S. cent range would be relatively neutral.

— Phil Franz-Warkentin reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

The post Virus concerns add more uncertainty to cattle market appeared first on Country Guide.

Retailers are stocking their meat cases this week ahead of the Labour Day holiday on Sept. 2, while a Tyson Foods slaughterhouse in Holcomb, Kansas, has been shuttered due to an Aug. 9 fire.

“So you had strong demand on the wholesale end, and then you tightened supply by Tyson being offline,” said Alan Brugler, president of Brugler Marketing + Management.

The U.S. Department of Agriculture on Tuesday quoted choice boxed beef cutout at $241.70/cwt, up $2.57 from Tuesday and the highest in more than two years (all figures US$). Select cutout fell 25 cents, to $214.27, but was up from $200.58/cwt a week ago.

As a result, strong beef packer margins “give them (processors) incentive to kill more cattle, which solves some of the problem of Tyson being shut down,” Brugler said.

CME live cattle futures tumbled last week as news of the Tyson fire threatened to curb demand for fat cattle. But the market rallied on Monday after government data showed that last week’s U.S. cattle slaughter came in above expectations, despite the loss of the Kansas plant.

On Tuesday, CME October live cattle futures ended up 1.775 cents at 100 cents/lb., and October feeder cattle settled up 0.475 cent at 133.65 cents/lb.

Live cattle futures drew additional support from expectations of higher cash cattle trade this week, given rising beef cut-out values, Brugler said. Cash cattle traded from $105 to $107/cwt last week.

CME lean hog futures rose on Tuesday for a second straight session but stayed inside of last week’s trading range.

CME October hogs settled up 0.95 cent at 64.975 cents/lb.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

The post U.S. livestock: CME live cattle climb on wholesale beef demand appeared first on Country Guide.