Agriculture market analysts said grain and soybean futures were bulled by Thursday’s World Agricultural Supply and Demand Estimates report, but they could have added live cattle to the list as well since all contracts closed higher.
The USDA report lowered its forecast for 2019 total red meat and poultry production to 104.603 billion pounds from 104.624 billion last month as lower beef, pork and turkey production forecasts more than offset higher broiler production.
For 2020, the total red meat and poultry forecast was raised to 106.784 billion pounds from 106.479 billion the previous month on higher expected beef and broiler production.
BEEF PRODUCTION PREDICTION LOWERED
The 2019 beef production estimate was reduced to 26.953 billion pounds from 27.043 billion the previous month primarily on slower expected pace of fed cattle slaughter and lighter carcass weights in the fourth quarter.
The 2020 beef production forecast was raised to 27.670 billion pounds from 27.565 billion last month as higher expected first-half 2020 marketings supported forecasts for higher fed cattle slaughter in 2020. First-half carcass weights also were expected to support increased beef production.
Beef import and export forecasts for 2019 were reduced to 3.030 billion and 3.141 billion pounds, respectively, reflecting recent trade data. However, no changes were made to the import and export forecasts for 2020 of 2.960 billion and 3.245 billion pounds, respectively.
The fed steer price forecast for 2019 was lowered to $113.50 per cwt from $116.50 a month ago on current prices and expectations of continued price weakness. The 2020 forecast also was reduced to $115 from $119.
PORK PRODUCTION FORECAST LOWERED
The 2019 pork production forecast was reduced to 27.578 billion pounds from 27.633 billion a month ago on the current rate of slaughter in the third quarter and slightly lighter carcass weights. USDA’s Quarterly Hogs and Pigs report is to be released on Sep. 27 and is expected to provide information on producer farrowing intentions into early 2020.
The 2020 pork production forecast was unchanged from the August report at 28.410 billion pounds.
The 2019 and 2020 pork export forecasts were raised to 6.530 billion and 7.065 billion pounds, respectively, from 6.455 billion and 6.945 billion, respectively, the previous month on recent trade data and expectations of continued strong global demand for US pork products.
Hog price forecasts were reduced to 449.50 per cwt from $51.00 for 2019 and first-half 2020.
CHICKEN PRODUCTION OUTLOOK RAISED
The 2019 broiler production forecast was raised on recent production data and continued growth in average bird weights for the remainder of the year.
The 2020 broiler production forecast was raised from the previous month on expectations of a higher proportion of heavy bird weights.
The 2019 broiler export forecast was adjusted higher reflecting recent trade data, but no change was made to the 2020 export forecast.
The 2019 broiler price forecast was raised on recent price strength, but no change was made to 2020 price forecasts.
CATTLE, BEEF RECAP
Cash cattle trade this week ranged from $99 to $100 per cwt on a live basis, down $1 to $3 from last week, and at $159 to $162 on a dressed basis, down $1 to $5.
The USDA choice cutout Thursday was up $0.08 per cwt at $219.97, while select was up $0.20 at $198.60. The choice/select spread narrowed to $21.37 from $21.49 with 92 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday was $136.65 per cwt, up $0.71 from the previous day. This compares with Wednesday’s Sep contract settlement of $136.85, up $0.77.