The cattle market continues to give mixed signals this week, says Justin Gleghorn with Brock Thompson Trading in Amarillo, TX. While the market was limit down on Monday, overall the week ended with futures $1/cwt higher.
Just in time for grilling season, though, the market fundamentals are showing some support with box beef trading higher most of the week, he says.
Meanwhile last week's Cattle on Feed report still has the market a bit shaky as placements were higher than expected.
"The trade has been expecting a drop in the number of cattle being placed on feed," says Ron Plain, University of Missouri economist in his weekly cattle outlook."After all, USDA says the 2010 calf crop was smaller than the year before for the 15th consecutive year. Yet, USDA's May Cattle on Feed report said the number of cattle placed on feed during April was up 9.9%."
He says that during the first third of 2011, placements into feedyards were up 4.1% compared to January-April 2010 and the highest total for these four months since 2003. The number of cattle placed on feed in 2010 was up 5.3% compared to 2009.
"Bigger placements from a smaller calf crop? Part of the discrepancy is due to increased imports of feeder cattle from Mexico. Placements of U.S. born cattle were up 4.6% in 2010 and up 3.0% in the first four months of 2011. We have probably pulled ahead on placements, especially this spring given the drought in the Southern Plains. But, one has to wonder if recent calf crops were larger than originally estimated."
Ron Plain's Cattle Outlook report.
Meanwhile, check out USDA's National Feed Cattle Summary video report below:
USDA-AMS-LGMN National Feeder Cattle Summary 05-27-2011