This month’s USDA Cold Storage report likely will be considered neutral by livestock futures traders since beef and pork supplies were in line with expectations.
Total red meat supplies in US freezers on April 30 were up 4% from a month earlier but were down 4% from a year earlier.
Total pounds of beef on ice were down 1% from a month ago, but were down 2% from last year.
Frozen pork supplies were up 9% from March 30 but were down 6% from last year. Stocks of pork bellies were up 66% from a month earlier but were down 53% from last year.
BEEF SUPPLIES NO SURPRISE
ADMIS Analyst Chris Lehner said in his comment that beef stocks were not surprising because he felt that increased beef demand that began to show in February prompted packers to sell more fresh beef and put less into storage. The increased demand also was likely to draw inventory out of storage.
The Cold Storage report confirmed his and other analysts’ expectations. As a result, he expected no influence on the cattle futures or cash markets because of the report.
“If cattle move up or down this week, it isn’t due to (the) report,” he said.
The report showed 458.460 million pounds of beef in cold storage on April 30, compared with 464.001 million a month earlier and 467.799 million a year earlier. Of this year’s amount, 456.537 million was in public warehouses.
Interestingly, the report showed 42.824 million pounds of the beef on ice April 30, up 3% from 41.429 million a month earlier but up 22% from 35.007 million a year earlier.
PORK STOCKS IN LINE WITH SLAUGHTER
Frozen pork supplies were in line with larger slaughter rates during the latest month and the days were sales lagged, Lehner said. And since pork exports were up, lower pork stocks than a year ago also was expected.
The report showed 599.112 million pounds of pork in cold storage as of April 30, compared with 549.424 million a month earlier and 637.320 million a year earlier.
Monthly pork supplies are in line with seasonal averages only at lower levels. Changes from month to month mirror average levels and should decline into July, if they follow the trend. Last year, the summer low was in June.
Belly stocks were reported at 34.045 million pounds, compared with 20.570 million a month earlier and 72.592 million a year ago. These products will see greater demand in late summer as consumption of bacon, lettuce and tomato sandwiches increases.
Also, many restaurants continue to feature sandwiches with bacon as an added flavor point. With this much pork bellies in cold storage there’s should be no reason for them to stop.
CASH CATTLE QUIET
After cattle traded on the livestock exchange Wednesday at an average of $134.81 per cwt on a live basis, down $3.59 from $138.40 a week earlier, cash cattle began to trade at $133.75 to $135.75 live and $215.00 dressed.
However, much more trade occurred on Thursday and Friday at $133 to $134 live, with some up to $135.50, down $4 to $5 from mostly $138 last week. Some dressed-basis action also occurred at $212 to $213.
The USDA’s choice cutout Monday was up $0.74 per cwt at $247.88, while select was up $1.41 at $222.83. The choice/select spread narrowed to $25.05 from $25.72 with 75 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Friday was $142.88 per cwt, down $0.98. This compares with Monday’s May settlement at $144.25, up $0.90.