Cattle-On-Feed Report Seen Neutral To Friendly

4-28-14 – The USDA’s monthly Cattle-On-Feed report Friday was considered neutral to supportive for cattle futures.\r\n\r\n   The only piece of information that could be anything different could be the placement rates, which were down 5% from a year earlier to 1.795 million head.  Prior to the report, market analysts said they expected a gain of almost 1%.\r\n\r\n   Still, March placements were within the range of pre-release estimates, and a USDA chart showed the trend was seasonal.\r\n\r\n   March marketings were in line with pre-release estimates but are expected to increase into the summer based on winter placements.  So far this year, however, slaughter has fallen behind last year at 9.447 million head, down 6.4%, from 10.088 million in the same period a year ago.\r\n\r\n   If slaughter picks up as predicted, it could result in more beef production since slaughter weights are holding in line with last year’s trend and historically bounce in May. \r\n\r\n   The resulting pressure on beef prices may allow more beef to be featured at retail than pork, especially since pork prices are rising as Porcine Epidemic Diarrhea virus kills million of baby pigs.\r\n\r\n \r\n\r\nBEEF SHARPLY HIGHER, YET CASH CATTLE SLIP\r\n\r\n \r\n\r\n   Boxed beef prices were sharply higher last week, although a late-week slip allowed cash cattle prices to decline.  The choice cutout fell to $232.83 per cwt, off $0.97 from Thursday, but up $6.48 from a week earlier.  Select was $221.64, down $0.43 on the day but up $6.41 for the week.\r\n\r\n   Cash cattle traded at $ $146 on a live basis, down $1 to $2 from the previous week.\r\n\r\n   The CME Feeder Cattle Index for the seven days ended Thursday was $179.10, up $0.12, while the May futures contract settled Friday at $180.00, up $0.40.  April live cattle settled at $145.00, up $0.75.\r\n\r\n \r\n\r\nCORN FIRMS AMID WET FORECASTS\r\n\r\n \r\n\r\n   CBOT corn futures are up in overnight trading as weekend weather forecasts point to a wet week for many producers.  Next week may be drier, but it’s just that much closer to a May 15 deadline for getting corn planted before “yield drag” sets in for corn planted after this date.\r\n\r\n   Some traders also are worried that persistent rains in the south, Delta and even the Midwest could cause growers to switch intended corn acres to soybeans.  But others are not so worried.  Last year proved how quickly crops could get planted, and farmers likely will perform equally as well this year.\r\n\r\n   Corn markets may be getting additional support from an Informa prediction of higher corn use for ethanol production and for exports.  Informa was said to be boosting its estimate of corn grind as winter’s logistical problems ease and a continued strong trend in ethanol production continues.\r\n\r\n   The USDA’s National Agriculture Statistics Service today is scheduled to release its weekly crop progress and condition report.  Many expect reported corn planting to be up to 20% to 25% done, up from 6% last week. \r\n\r\n   However, as with last week’s report, there are those who say NASS will be behind actual progress as many farmers were too busy to report.  Estimates of actual progress range up to 30% to 35% complete.\r\n\r\n \r\n\r\nIN OUR OPINION\r\n\r\n \r\n\r\n–China beef imports likely will rise with middle-class demand.\r\n\r\n–Declining hog numbers and rising pork prices are supporting beef markets despite record-high wholesale and retail levels.  \r\n\r\n–Continually rising beef prices risk making steaks a wealth food.\r\n\r\n–Retailers are gearing up for grilling demand in May, but if the weather doesn’t cooperate, the backlash into wholesale markets could be swift.