Beef Market Update: Market proving itself after bearish Cattle on Feed report

Last week’s Cattle on Feed report, published by the United States Department of Agriculture, listed a 4 percent increase in cattle and calves on feed for the slaughter market, when compared to September 1, 2016. In August, placements totalled 1.93 million head, up 3 percent from 2016.

“There was a bearish surprise to the placement,” says Anne Wasko of Gateway Livestock Exchange, in this episode of the Beef Market Update (BMU). “And so the market dealt the first half of this week dealing with the negative news from that, but, as we come into the end of the week, we’ve clawed a good chunk of that back.”

Perhaps most surprising with reports of high supplies is that the wholesale price of beef is also higher than this time last year. Wasko says this could be due to a few factors, including strong domestic demand and good exports for both the U.S. and Canada.

The other unusual side of the coin, is where basis is sitting, which Wasko says could be due to tight Canadian supplies.

“September was the best basis month ever for Alberta, as far as where we traded vis-à-vis the U.S.,” says Wasko. “We were, in Canadian dollars, $4 a hundred over the U.S. — the historic average is 9 under.”

Looking into the fall, cattle sellers will have to keep an eye on the exchange rate (though it has certainly calmed since the last BMU), monitor basis, and think about feed supplies. But, for now, says Wasko, it looks like the 2017 calf crop will come off at a better price than last year.

 

RealAgriculture News Team

A team effort of RealAgriculture’s videographers and editorial staff to make sure that you have the latest in what is happening in agriculture.


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