Daily Livestock Report for 3 Aug 2010

Market Comments

Livestock futures ended the week on a high note as most hog
and cattle contracts continued to build on earlier gains. Sharply highergrain prices are clearly negative for producer profitability going forward
and higher cattle and hog prices reflect the higher costs of doingbusiness later this year and in 2011. 2011 corn futures are above $4
per bushel despite expectations of good yields this fall. The rise in corn
prices, they are up by more than 60 cents or 18% since late June, has in
part resulted from a reassessment of current corn stocks. Both the supply
and quality of corn appears to be worse than previously thought.
More recently grain markets have been buoyed by reports of wheat croptroubles in Russia and other former Soviet countries. As it was the
case with Australia a couple of years ago, it takes time for the full extent
of the damage to become known and we are seeing reports of even
lower production prospects for wheat, barley and other grains in that
part of the world. December Chicago wheat prices were up by more 34cents per bushel on Friday and for the week they gained some 74 centsper bushel. For the week, Dec corn and Nov soybeans were up 24 and
26 cents, respectively.

In addition to a more bullish outlook for grain prices later this
year and in 2011, livestock futures have also benefited from strong
grains in product markets. Pork continues to lead the parade, with
very strong prices for a number of items. Pork bellies hit $135 /cwt this
week, a new all time record. August belly futures on Friday were
$103.5 /cwt, which is not all that unusual as basis levels tend to be the
highest during this time of year. Pork supplies are very tight despite
relatively high carcass weights for this time of year. Hog slaughter for
the week was reported to be 7.3% lower than the previous year andeven with the gains in carcass weights, total production for the weekwas down 6.8%. Note that carcass weights for the last two weeks areconsidered provisional and we will see if USDA goes backs and revises
them lower, which was the case earlier in July. On the one hand, hot
and humid weather should contribute to lower weights especially as
temperatures in key production areas are higher than a year ago. However, we suspect that very strong pork prices have encouraged
producers to be very aggressive in feeding animals and maybe hold them on feed a bit longer. After all, hog slaughter since
June 1 (latest Hogs and Pigs report date) has been on average 4.6% lower than a year ago. Based on the USDA hogs and pigs inventory
numbers, slaughter for the period in question should have been around 3% lower than the previous year.
on the other hand remain well below year ago levels and also below the five year average. It is understandable that with more
cows in the slaughter mix weights will be lower but the magnitude of the decline points to a more dramatic change in both the cattle
being placed on feed as well as feed rations and rate of weight gains.

Vol. 8, No. 147 / July 30, 2010

810
DRESSED CARCASS WEIGHT, ALL CATTLE, POUNDS
Data through Week Ending July 31, 2010
800
790
780
770
760
740
750
Jan Feb Mar Apr May Jun Jul Aug
2005-09 Avg.
Sep Oct
2009
Nov Dec
2010
206
DRESSED CARCASS WEIGHT, ALL HOGS, POUNDS
Data through Week Ending July 31, 2010
204
202
200
198
194
196
Jan Feb Mar Apr May Jun Jul Aug
2005-09 Avg.
Sep Oct
2009
Nov Dec
2010
Cattle weights,

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Disclaimer: The Daily Livestock Report is intended solely for information purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade any
commodities or securities whatsoever. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are
attempted. Futures trading is not suitable for all investors, and involves the risk of loss. Past results are no indication of future performance. Futures are a leveraged investment, and because only a percentage of a contract’s
value is require to trade, it is possible to lose more than the amount of money initially deposited for a futures position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyle.
And only a portion of those funds should be devoted to any one trade because a trader cannot expect to profit on every trade.

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Page 2

Vol. 8, No. 147 / July 30, 2010

PRODUCTION & PRICE SUMMARY Week Ending 7/31/2010

Item Units Last Week Prior Week Pct. Change Last Year Pct. Change 2010 YTD
Y/Y %
Change
31-Jul-10 24-Jul-10 1-Aug-09
C
A
T
T
L
E
FI Slaughter
FI Cow Slaughter **
Avg. Live Weight
Avg. Dressed Weight
Beef Production
Thou. Head
Thou. Head
Lbs.
Lbs.
Million Lbs.
654
120
1281
772
503.4
666
101
1281
770
511.5
-1.80%
18.34%
0.00%
0.26%
-1.58%
641
116
1288
786
500.7
2.04%
3.28%
-0.54%
-1.78%
0.54%
19,433
3,491
1,272
766
14,822
1.3%
4.0%
-1.4%
-1.9%
-0.7%
Live Fed Steer Price
Dressed Fed Steer Price
OKC Feeder Steer Price
Beef Cutout Value
Hide/Offal
$ per cwt
$ per cwt
619-700 Lbs.
619-900 Ch.
$/cwt
92.87
147.85
97.00
154.01
10.55
94.79
150.44
96.04
154.94
10.65
-2.03%
-1.72%
0.99%
-0.60%
-0.94%
82.10
131.35
97.58
142.53
8.23
13.12%
12.56%
-0.59%
8.05%
28.19%
H
O
G
S
FI Slaughter
FI Sow Slaughter **
Avg. Dressed Weight
Pork Production
Thou. Head
Thou. Head
Lbs.
Million Lbs.
1,949
56.4
202.0
392.9
1,955
51.9
202.0
394.2
-0.31%
8.59%
0.00%
-0.33%
2,103
64.6
201.0
421.7
-7.33%
-12.74%
0.50%
-6.83%
61,624
1,633
203
12,520
-4.0%
-6.7%
0.1%
-4.0%
Iowa-S. Minn. Direct
Natl. Base Carcass Price
Natl. Net Carcass Price
Pork Cutout
Wtd. Avg.
Wtd. Avg.
Wtd. Avg.
185 Lbs.
80.85
78.69
81.38
88.43
78.08
75.40
78.04
83.83
3.55%
4.36%
4.28%
5.49%
54.94
59.13
61.29
60.85
47.16%
33.08%
32.78%
45.32%
C
H
I
C
K
E
N
Young Chicken Slaughter *
Avg. Weight
Chicken Production
Eggs Set
Chicks Placed
Million Head
Lbs.
Million Lbs.
Million
Million Head
166.6
5.50
916.5
208.3
169.4
163.0
5.55
904.8
208.8
173.8
2.22%
-0.90%
1.30%
-0.23%
-2.53%
160.7
5.48
880.9
201.4
167.0
3.67%
0.36%
4.05%
3.44%
1.45%
4,642
5.57
25,855
6,207
5,104
2.4%
1.4%
3.8%
1.7%
0.7%
12-City Broiler Price
Georgia Dock Broiler Price
Composite
2.5-3 Lbs.
82.14
86.91
85.38
87.08
-3.79%
-0.20%
79.32
87.12
3.56%
-0.24%
T
U
R
K
Young Turkey Slaughter *
Avg. Weight
Turkey Production
Million Head
Lbs.
Million Lbs.
4.567
28.46
130.0
4.606
28.86
132.9
-0.85%
-1.39%
-2.22%
4.863
28.17
137.0
-6.09%
1.03%
-5.12%
125.605
29.70
3,730
-4.4%
1.8%
-2.7%
Eastern Region Hen Price 8-16 Lbs. 95.17 93.50 1.79% 81.20 17.20%
G
R
A
I
N
Corn, Omaha
DDGs, Minnesota
Wheat, Kansas City
Soybeans, S. Iowa
Soybn Meal, 48% Decatur
$ per Bushel
$ per Ton
$ per Bushel
$ per Bushel
$ per Ton
3.58
94.00
5.62
10.49
329.90
3.37
96.00
5.06
10.47
325.20
6.23%
-2.08%
11.07%
0.19%
1.45%
3.20
73.50
5.34
11.18
383.80
11.88%
27.89%
5.24%
-6.17%
-14.04%

* Chicken & turkey slaughter & production are 1 week earlier than the date at the top of this sheet.
** Cow and sow slaughter reflect levels from two weeks ago due to reporting lag.
Disclaimer: The Daily Livestock Report is intended solel for information purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade any
commodities or securities whatsoever. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are
attempted. Futures trading is not suitable for all investors, and involves the risk of loss. Past results are no indication of future performance. Futures are aleveraged investment, and because only a percentage of a contract’s
value is require to trade, it is possible to lose more than the amount of money initially deposited for a futures position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyle. And
only a portion of those funds should be devoted to any one trade because a trader cannot expect to profit on every trade.