Cattle and calves on feed for slaughter market in the U.S. for feedlots, with capacity of 1,000 or more head, totaled 9.6 million head on Aug. 1. The inventory was 2 percent below Aug. 1, 2008.
Placements in feedlots during July totaled 1.86 million, 13 percent above 2008. Net placements were 1.82 million head. During July, placements of cattle and calves weighing less than 600 pounds were 455,000, 600-699 pounds were 365,000, 700-799 pounds were 458,000, and 800 pounds and greater were 585,000.
Marketing activity of fed cattle during July totaled 1.93 million, 5 percent below 2008. This is the third lowest marketing level for the month of July since the series began in 1996.
Other disappearance totaled 43,000 during July, 4 percent below 2008. This is the lowest other disappearance for the month of July since the series began in 1996.
All cattle and calves in the U. S. and Canada combined totaled 116.6 million head on July 1, 2009, down 2 percent from a year ago. All cows and heifers that have calved, at 47.0 million head, was down 2 percent from a year ago.
All cattle and calves in Canada as of July 1, totaled 14.8 million head, down 2 percent from the 15.2 million on July 1, 2008. The number of all cows and heifers that have calved, at 5.57 million, was down 5 percent from the 5.84 million on July 1, 2008.
Frozen food stocks in refrigerated warehouses on July 31 were greater than year earlier levels for cheese, pork, butter, eggs, beef and turkey.
Total red meat supplies in freezers were down 2 percent from the previous month, but up 7 percent from last year. Frozen pork supplies were down 5 percent from the previous month, but up 8 percent from last year.
Stocks of pork bellies were down 21 percent from last month,, but up 4 percent from last year.
Total frozen poultry supplies on July 31, 2009 were up 6 percent from the previous month but down 3 percent from a year ago. Total stocks of chicken were up 4 percent from the previous month but down 8 percent from last year. Total pounds of turkey in freezers were up 8 percent from last month and up 3 percent from July 31, 2008.
Corn closed the week $.02 1/2 higher. The weekly export sales report showed net sales of 577,000 metric tons were up 7 percent from the previous week and 6 percent from the prior four-week average. Increases reported for Japan (319,400 MT, including 57,500 MT switched from unknown destinations and decreases of 10,200 MT), Egypt (184,800 MT, including 60,000 MT switched from unknown destinations), Venezuela (75,000 MT), South Korea (61,300 MT, including 55,000 MT switched from unknown destinations), and Mexico (47,400 MT).
For the marketing year, the U.S. has now exported 1.863 billion bushels of corn compared to 2.419 bb last year. As of Aug. 16, the 2009 crop was rated at 68 percent good to excellent versus. 67 percent a year ago. This is the highest rated crop in the last five years and the second highest crop rating in the last 9 years. Current yield estimates are 159 bushels per acre, but this could increase with beneficial weather until harvest. Due to slow demand trends, ending stocks could and will likely swell to over 2 billion bushels. With the large ending stocks figure, it does not leave a very bullish outlook for prices over the next four months. Producers should be prepared to reward rallies with additional sales and hedges.
Soybeans closed the week $.01 1/2 lower. The weekly export sales report showed net sales of 274,900 MT were up 6 percent from the previous week, but down 17 percent from the prior four-week average. Increases were primarily for China (222,000 MT), the Dominican Republic (18,000 MT), Taiwan (11,000 MT), Indonesia (6,900 MT), and Japan (5,900 MT). Decreases were reported for Guatemala (2,100 MT) and Syria (1,300 MT).
Net sales of 583,100 MT for 2009/10 delivery were for China (393,000 MT), unknown destinations (108,000 MT), Taiwan (69,000 MT) and Mexico (13,100 MT). For the marketing year, the U.S. has now exported 1.305 bb of soybeans compared to 1.149 bb last year.
The USDA rated the soybean crop, as of Aug. 16, at 66 percent g/e, 4 percent higher compared to last year’s crop rating. This is the highest rated soybean crop in the last five years and the second highest rated soybean crop in the last 15 years. Soybeans are currently in the key pod-setting stage with 72 percent of the crop setting pods. China purchased soybeans every day last week from the USDA.
This not only supported trade despite a bearish weather outlook, but their buying interest led to commercial buying that produced a breakout on the daily charts. The Chinese purchases will tighten new crop balance sheets. Weather still looks good and a big harvest is still coming, so look for prices to work lower after Labor Day.
Brian Hoops is president and senior market analyst of Midwest Market Solutions Inc. Midwest Market Solutions is a full-service commodity brokerage and marketing advisory service, clearing through R.J. O’Brien.
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