Evening Report (VIP) -- February 22, 2013

February 22, 2013 09:18 AM
 

CATTLE ON FEED REPORT: MOSTLY NEUTRAL... This afternoon's Cattle on Feed Report showed both Placements and Marketings above the average pre-report guesses, but that left the On Feed category right in line with expectations. The report is mostly neutral, although it may promote bull spreading Monday as the Marketings number is supportive for nearby futures and the Placements figure may limit buying in deferred months.

 

COF Report

USDA

Average

Range

% of year-ago levels

On Feed

94
93.8

93.3-94.3

Placements

102

100.3

97.5-104.0

Marketings

106

104.7

103.2-106.6

 

A breakdown of cattle placed into feedlots last month reveals: lightweights steady with year-ago, 6-weights down 8%; 7-weights up 1.9%; and heavyweights up 12.1%. The placement of of heavier calves last month may be the result of animals finally moving into feedlots that were held off feed dating back to last fall because of high feed costs.

 

 

COLD STORAGE REPORT: PORK STOCKS NOT QUITE AS BIG AS FEARED... Pork stocks in storage as of Jan. 31 totaled 605.266 million lbs., which was just slightly less than the average pre-report guess of 606.9 million pounds. Pork stocks came in 9.7% greater than December and 3.4% more than year-ago.

Beef stocks at the end of January totaled 484.003 million lbs., which was slightly more than the average pre-report guess of 481.1 million pounds. Beef stocks came in 3.9% above December, but 0.2% below year-ago.

Poultry stocks as of Jan. 31 totaled 1.021 billion lbs., which was up 4.7% from month-ago and 12.4% above January 2012.

 

 

WILL OBAMA ISSUE AN EXECUTIVE ORDER TO KEEP MEAT INSPECTIONS WORKING?... While President Obama has overreached with some of the Executive Orders he has issued, some believe it’s time for one more to keep meat inspectors on the job if sequestration spending cuts kick in March 1. President Obama’s use of executive orders is widely known, and don’t rule out this avenue should the public health be in danger relative to food safety inspector furloughs.

 

 

BOATS BACKED UP AT BRAZILIAN PORTS... South American consultant Dr. Michael Cordonnier told us this morning there were 82 vessels waiting to be loaded at the Port of Paranagua (31 were waiting last year at this time); 59 boats were waiting at the Port of
Santos (29 last year at this time). Delayed loadings are the result of slow harvest progress
in Mato Grosso due to soggy fields.

Brazil’s shipping delays are switching some old-crop bean business back to the United States. As we reported in "First Thing Today," Reuters newswire reported China purchased up to nine cargoes of U.S. old-crop soybeans this week and two of the cargoes were originally purchased from Brazil. The remaining cargoes were either new sales or switched from Gulf origin to shipment from the Pacific Northwest (PNW).

Port workers across Brazil staged a temporary strike this morning in protest of the privatization of ports by the government. Port workers were planning another six-hour strike next Tuesday afternoon, but Reuters is reporting that work stoppage has now been called off.

All this activity makes it clear that China needs beans now and Brazil can’t fill those needs (at this time). This opens the U.S. export window wider, upping the odds USDA’s bean export estimate will again inch higher in the March 8 Supply & Demand Report.

 

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