Beef and cattle prices could be supported in coming days and weeks by the latest USDA/National Agricultural Statistics Service Cold Storage report Monday, which showed stored beef supplies continuing to decline to their lowest point in three years.
However, since declining inventories were expected widely, the bullish effect may be reduced to being only supportive.
Total red meat in cold storage as of April 30 was up slightly from March at 1.134 billion pounds, but down 95.308 million, or 7.76%% from last year. However, monthly gains were all in pork as frozen beef supplies declined 14.914 million, or 3.19% from March and 31.947 million, or 6.60% from 484.294 million a year earlier.
A graph of the amount of beef in cold storage shows a decided decline in frozen beef inventories from the first of the year.
The data show a decided decline of frozen inventories that is approaching the 2010-2014 average. It appears ready to mirror the five-year average in coming months as there is a strong seasonal influence to take beef inventories lower through the summer.
PORK SUPPLIES UP
April 30 frozen pork supplies, at 635.424 million pounds, were the highest this year and were up 21.621 million, or 3.52% from 613,803 million in March but down 65.659 million, or 9.37% from 701.083 million last year.
Such a month-to-month increase in stores of pork might be bearish to prices if it weren’t such a normal fixture. However, the summer decline in pork stocks that goes hand-in-hand with the decline in beef stocks.
There is a strong tendency for pork supplies to fall into July were they begin a slow rise into the holiday season when demand for hams reduces frozen stocks. The spring/summer decline in frozen stocks is linked to reduced slaughter at that time of year.
POULTRY STOCKS UP
Just to add pressure to red meat supplies, total poultry stocks in cold storage rose to 1.214 billion pounds in April, a record April total and up 42.133 million, or 3.60%, from 1.171 billion a month earlier.
Compared with last year, total frozen poultry inventories were up 48.355 million pounds, or 4.15%, from 1.165 billion. Inventories also were up 14.994 million, or 14.1%, from the 2010-2014 average of 1.064 billion.
The amount of turkey in cold storage was up from March, but this increase almost matches last year and the five-year average and is so seasonal as to be of little consequence in the total scheme of things.
Year-over-year chicken stores continue to gain, however. April stocks were listed at 806.108 million pounds, up 40.477 million, or 5.29%, from 756.631 million last year, and up 157.852 million, or 24.3%, from the previous five-year average of 648.523 million.
CASH CATTLE MARKET QUIET
Cash cattle markets Monday were quiet with no reported bids or offers. Cash markets last week were $1 to $3 per cwt lower at mostly $130 to $132 on a live basis.
Feedlot showlists appeared mixed with larger supplies in the north and smaller supplies in the south.
The USDA’s choice cutout Monday was $1.64 per cwt lower at $224.32 per cwt, while select was off $1.27 at $207.15. The choice/select spread narrowed to $17.17 from $17.54 with 88 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Friday was $150.42 per cwt, up $1.89. This compares with the May settlement Monday of $147.00, down $1.62.