In the middle of all the excitement related to the elections Tuesday we can also find something of interest the US livestock industries were watching. Proposition 2 would end battery cages for laying hens, gestation crates for sows, and veal crates on January 1, 2015. Producers would have to either expand the size of crates/cages to allow animals to turn around freely, lie down, stand up, and fully extend their limbs or move to a group type system. Florida and Arizona have previously passed similar voter initiatives. Oregon and Colorado's governors have signed similar legislation in the past two years.
The stock market was lower most of the day Wednesday, but beef fundamentals, for this week at least, are strong. In just the three days of this week wholesale beef prices are up $5.43 for choice and $4.00 for select-boxed beef.
Bids of $92 and $92.50 were posted Wednesday against asking prices of $95 and $96. $93 trade at least should be seen this week. Last week saw most trading at $92. December live cattle may be able to hit $95 if the stock market can hold its ground. That is based on the tightened feedlot supply situation. Do not get too excited though. Bearish economic data should be seen in the next two days. Jobless claims will be out Thursday and unemployment/non-farm payroll changes on Friday.
Thursday and Friday there will be a storm hitting the northern plains (Nebraska through North Dakota). Though it should not affect any of the main feedlot areas from Nebraska through Texas it underscores the idea we need to begin following daily weather reports.
Typically there are around two major storms each winter between December and February, which move the market.
Every Thursday morning USDA reports both grain and beef sales for the previous week. Here's a quick primer. From mid July through mid September weekly beef exports were phenomenal and ran a full 47% higher than last year. The weekly figures ran from 7,000 to 22,000 metric tons (29 to 96 million lbs). However from 10/2 through 10/16 it was like the switched was flipped and they ran a minuscule 3,400 to 3,800 lbs. That was 56% UNDER last year. The October 23 number at 8,600, reported last week, was 12% under last year. The key right now is to at least get these exports back above last year. For Thursday's report...we need to at least meet last year's figure, which was 7,600 tons. Anything less and we still have problems.
The trend is technically now sideways and turning short term higher. We have the next projected major turn day as November 18.
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