Cattle Current Daily-Jan. 22, 2019

Cattle Current Daily-Jan. 22, 2019

When all was said and done, negotiated cash fed cattle trade was mostly steady last week at $124/cwt. on a live basis in the Southern Plains and Nebraska, but $1 higher in the western Corn Belt at $123-$125. Dressed trade was steady at $197.

Futures and equity markets were closed Monday in honor of Martin Luther King Day.

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Global economic growth continues to weaken, according to the latest World Economic Outlook Update from the International Monetary Fund (IMF).

IMF projects global economic growth at 3.5% this year and 3.6% next year; 0.2% and 0.1% less than October’s estimate.

“Even as the world economy continues to move ahead, it is facing significantly higher risks, some of them related to policy,” explained Christine Lagarde, IMF chair and managing director, at press conference for the update. “These risks are now increasingly intertwined: think of how higher tariffs and rising uncertainty over future trade policy fed into lower asset prices and higher market volatility. This in turn contributed to tightening financial conditions, including for advanced economies, which is a major risk factor in a world of high debt burdens.”

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Even if the partial government shutdown—the longest in history—ended this week, odds are against the monthly Cattle on Feed report going out Jan. 25, as originally planned.

To their credit, and understanding the limitations of available data, the Livestock Marketing Information Center (LMIC) provided its estimates on Friday.

“Placements (feedlots with a capacity of 1,000 head or more) are expected to be slightly larger than a year ago. Feeder cattle imports from Mexico and Canada were about 25,000 head higher year-over-year. Auction receipts showed strong volumes relative to a year ago, both pointing to more placements,” say LMIC analysts, in the latest Livestock Monitor. “The headwind to placements has been extremely muddy conditions in feedlots, especially in Kansas and Nebraska. LMIC estimates that placements during December were 0.6% more than a year ago. This would be the highest December placement number since 2010.”

LMIC projects December marketings at 0.5% less than a year ago. Analysts emphasize this is the most difficult projection, based on missing data.

“Actual weekly slaughter has not been released since Dec. 8, so this estimate relies on estimated daily slaughter,” LMIC analysts explain. “While the estimated slaughter data is better than no data, there is a large difference in precision. Estimated daily slaughter for steers and heifers are rounded to the nearest 1,000 head, while actual slaughter is down to the number of head. Over the course of an entire month, estimated versus actual can vary.”

Between placement and marketing estimates, LMIC projects the inventory of cattle on feed Jan. 1 to be 2.1% more than a year earlier.

2019-01-21T19:00:04-05:00

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