Beef Cutout Up Sharply; Still Below January Redord

The USDA’s beef cutout value rose sharply last week, but while the gains were impressive, the values themselves fell short of record highs set in January.\r\n   Choice boxed-beef values Friday were quoted at $225.33 per cwt on a live basis, up $3.92 on the day and up $11.58 for the week.  The weekly average was $217.29, well short of the $238.43 high posted by the Livestock Marketing Information Center the last week of January.  Since topping out there, the weekly choice cutout dropped to $208.83 the third week of February.\r\n   The USDA’s select cutout Friday ended at $223.12 per cwt up $4.12 from Thursday and up $12.24 for the week.\r\n   Cash cattle trading began at midweek with prices moving up $3 to $5 per cwt from the previous week on a live basis to $150 to $152.  This helped Feb cattle futures to expire at a record high futures price of $153.\r\n   Market analysts blame very tight supplies of slaughter-ready cattle for the price support.  The US total cattle herd was reported at 87.730 million head, a record low since records began to be kept in 1954 and below the previous record low in 1958 of 91.176 million. \r\n   Given the tight supplies, prices may be supported on declines, but packer margins are said to be deeply negative, which could limit packer incentive to continue paying higher prices for slaughter inventory.\r\n   AgResource said, “Extreme volatility is likely to persist” into the early weeks of summer.\r\n   But beef prices may get further support from tightening pork supplies, market analysts said.  ADMIS analysts said thinning stocks of competing red meat were part of the reason for last week’s gains in futures markets, along with declining slaughter weights and fears of further weight declines in coming weeks.\r\n\r\nUKRAINE TENSIONS RISE; NO EXPORT INTERRUPTIONS YET\r\n\r\n   Despite increasing tensions in Ukraine, no delays have been reported in grain exports, but the situation remains tense, and grain and soybean markets are sharply higher in overnight trading as markets build in a risk premium, analysts said.  \r\n   AgResource estimated that Ukraine will export a little more than 2.4 million tonnes of wheat between March and May after peaking in September.  AgResource also estimated that Ukraine corn exports through February at a record-large 12.9 million tonnes and March-through-September exports at 6.6 million tonnes, taking the crop-year exports to a record high.\r\n   Some credit the location of ports in western Black Sea ports as part of the reason exports have not been affected yet, since they are located well away from the current hot spot, Crimea.\r\n   Russian troops moved to take control of the Crimea peninsula after Russia’s parliament gave President Vladimir Putin authority to protect Russian interests in the region.  The area has strong cultural ties to Russia, and many of its residents speak Russian.  Crimea also is home to a Russian naval base.\r\n   Ukraine said Russia was building up armored vehicles near the Crimea, and the Russian Ruble fell to an all-time low against the US Dollar, and The Russian gas monopoly Gazprom, which supplies Europe through Ukraine, was down more than 13%, Reuters reported. \r\n   In response, Ukraine has mobilized its reserve army, and the actions of the two groups are destabilizing the region.  \r\n\r\nCHINA PMI FALLS, THREATENS MANUFACTURING RETRACEMENT\r\n\r\n   China reported its official Purchasing Managers’ Index at 50.2 over the weekend, down sharply from the 52.6 reading that was reported Feb. 1 and the weakest Chinese manufacturing PMI in eight months.  A reading below 50 shows retracement, while readings above 50 show growth.\r\n   The Chinese Yuan fell to a year low on Friday, a move some analysts saw as reason to think the central bank is trying to make the country more competitive in world markets.  And after the weekend PMI reports, there is speculation the currency may decline even more on Monday.\r\n\r\nWINTER STORM MOVES INTO EASTERN US\r\n\r\n   Another winter storm is heading into the eastern US after exiting the Plains over the weekend.  The storm brought bitter cold temperatures and snow, but it tracked farther south than many had predicted, bringing less snow to the Midwest and more rain to the South.  Northeastern states are expected to be hammered again before it’s over.\r\n