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Live cattle
Fundamental Notes -
On August 12, 2010, the USDA said that they expect beef production to be down 1% in 2010 and choice steers to average 94.0 cents per pound. So far in 2010, U.S. beef production is down 1% from a year ago. In 2011, they expect beef production to be down 2%.
The August 1st cattle on-feed inventory was 9.873 million head, up 2.4% from a year ago, a little more than expected. July placements were down 6% and marketings were down 2% from a year ago. As of July 1, 2010, the U.S. cattle and calf inventory totaled 100.8 million head, down 1.2% from a year ago, as expected. On February 11, 2010, the USDA said that they expect cattle inventory to bottom sometime in 2011.
| U.S. Beef Production (in billion pounds)
| | Calendar Year | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011
| | Production | 26.11 | 27.09 | 26.24 | 24.55 | 24.68 | 26.15 | 26.42 | 26.56 | 25.96 | 25.65e | 25.13e
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| U.S. Beef Production (in billion pounds)
| | Calendar Year | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000
| | Production | 22.74 | 22.92 | 23.09 | 22.94 | 24.28 | 25.12 | 25.42 | 25.38 | 25.65 | 26.39 | 26.78
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Key Events - Live cattle
2010
8-20 - USDA: August 1 cattle on feed +2.4% from a year ago, a little more than expected.
8-19 - Canada count 14.011 million head of cattle on July 1st, down 4.9% from a year ago.
8-13 - USMEF: Jan. to June beef export volume +14% from a year ago.
7-23 - USDA: July 1 cattle inventory down 1.2% from a year ago, as expected.
7-23 - USDA: July 1 cattle on feed +3.3% from a year ago, as expected.
7-14 - USMEF: Jan. to May total beef exports +11% from a year ago.
6-18 - USDA: June 1 cattle on feed +.8% from a year ago, as expected.
6-11 - USMEF: Jan. to Apr. total beef exports +11% from a year ago.
5-21 - USDA: May 1 cattle on feed -3.4% from a year ago, slightly less than expected.
5-13 - USMEF: Q1 total beef exports +11% from a year ago.
4-23 - USDA: Apr. 1 cattle on feed -3.5% from a year ago, less than expected.
4-14 - USMEF: February total beef exports +9% from a year ago.
3-19 - USDA: Mar. 1 cattle on feed -3.2% from a year ago, as expected.
3-12 - USMEF: January total beef exports +9% from a year ago.
2-19 - USDA: Feb. 1 cattle on feed -2.6% from a year ago and a little more than expected.
2-18 - USMEF: December total beef exports +9% from a year ago.
2-16 - Statistics Canada: 13.0 million head of cattle in inventory on January 1st, down 1.3% from a year ago and the lowest number in 15 years.
1-29 - January 1st cattle inventory down .9% from a year ago and the lowest in seven years, but a little more than expected.
1-22 - USDA: Jan. 1 cattle on feed -2.0% from a year ago, less than expected.
1-15 - USMEF: November total beef exports +4% from a year ago.
2009
12-18 - USDA: Dec. 1 cattle on feed -.6% from a year ago, less than expected.
12-11 - USMEF: October beef exports -4% v. year ago.
11-20 - USDA: Nov. 1 cattle on feed +.6% from a year ago.
11-16 - USMEF: September beef exports -22% v. year ago.
10-30 - R-CALF USA sends letter to White House, describes "acute crisis" in the cattle industry.
10-16 - USDA: Oct. 1 cattle on feed +.6% from a year ago, a little more than expected.
10-12 - USMEF: August beef exports -26% v. year ago.
9-18 - USDA: Sept. 1 cattle on feed -1.2% v. yr ago, more than expected.
9-11 - USMEF: July beef exports -13% from a year ago.
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Lean hogs
Fundamental Notes -
On August 12, 2010, the USDA said that it expects pork production to be down 3% in 2010 and the price of barrows and gilts to average 54.5 cents per pound (74 cents lean). So far in 2010, U.S. pork production is down 4% from a year ago. In 2011, the USDA expects pork production to be up 2%.
The June 1st count of all U.S. hogs and pigs was 64.400 million head, down 3.6% from a year ago and less than expected. The March to May pig crop was down 4.7% from a year ago. Frozen pork inventory as of July 31, 2010, totaled 391 million pounds, down 28% from a year ago. Frozen bellies totaled 21.8 million pounds, down 64% from a year ago. On February 11, 2010, the USDA said that they expect the U.S. hog inventory to bottom sometime in 2011.
| U.S. Pork Production (in billion pounds)
| | Calendar Year | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011
| | Production | 19.14 | 19.66 | 19.95 | 20.51 | 20.68 | 21.06 | 21.94 | 23.35 | 23.00 | 22.24e | 22.66e
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| U.S. Pork Production (in billion pounds)
| | Calendar Year | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000
| | Production | 15.35 | 16.0 | 17.23 | 17.03 | 17.66 | 17.81 | 17.09 | 17.24 | 18.98 | 19.28 | 18.93
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Notable Quote:
"John Lawrence at Iowa State University has long maintained an estimate of hog farm profitability. His numbers indicate that the typical farrow to finish operation turned a profit in March of $8.84/head. This was the first profitable month since August 2008. John estimates current breakeven at between $51/cwt and $52/cwt of live weight. Over the last two and half years, hog producers have lost more than $6 billion."
Grimes and Plain Hog Outlook, University of Missiouri. April 16, 2010.
Key Events - Lean hogs
2010
8-20 - USDA: Frozen pork in storage down 28% on July 31 from a year ago, more than expected. Frozen bellies in storage down 64% from a year ago.
8-19 - Canada have 11.781 million hogs on July 1st, down 2.4% from a year ago.
8-13 - USMEF: Jan to June pork export volume +3% from a year ago.
7-22 - USDA: Frozen pork in storage down 29% on June 30 from a year ago, less than expected. Frozen bellies in storage down 54% from a year ago.
7-14 - USMEF: Jan. to May total pork exports were down slightly from a year ago.
6-25 - USDA: June 1st hogs and pigs were down 3.6% from a year ago, less inventory than expected.
6-22 - USDA: Frozen pork in storage down 23% on May 31 from a year ago, more than expected. Frozen bellies in storage down 44% from a year ago.
6-11 - USMEF: Jan. to Apr. total pork exports -4% from a year ago.
5-21 - USDA: Frozen pork in storage -21% on April 30th from a year ago, much less than expected.
5-17 - China will accept U.S. pork produced on or after May 1st.
5-13 - USMEF: Q1 total pork exports down slightly from a year ago.
4-22 - USDA: Frozen pork in storage down 14% on Mar. 31 from a year ago, less than expected. Frozen bellies in storage down 19% from a year ago.
4-14 - USMEF: February total pork exports up nearly 1% from a year ago.
3-26 - USDA: March 1st hogs and pigs were down 2.8% from a year ago, less than expected.
3-22 - USDA: Frozen pork in storage down 17% on Feb. 28 from a year ago, more than expected. Frozen bellies in storage down 27% from a year ago.
3-18 - USMEF: January total pork exports -8% from a year ago.
2-22 - USDA: Frozen pork in storage down 18% on Jan. 31 from a year ago and a little less than expected. Frozen bellies in storage down 23% from a year ago and more than expected.
2-18 - USMEF: December total pork exports +8% from a year ago.
2-16 - Statistics Canada: 11.6 million hogs on farms on January 1st, down 4.5% from a year ago and the lowest in 12 years.
1-22 - USDA: Frozen pork in storage down 15% on Dec. 31 from a year ago, less than expected.
1-15 - USMEF: November total pork exports -.2% from a year ago.
2009
12-30 - USDA: December 1st hogs and pigs were -2.0% from a year ago, slightly more than expected.
12-22 - USDA: Frozen pork in storage down 7% on Nov. 30 from a year ago.
12-11 - USMEF: October pork exports -6% v. year ago.
11-20 - USDA: Frozen pork in storage down 1% on Oct. 31 from a year ago, less than expected.
11-16 - USMEF: September pork exports +3% v. year ago.
10-29 - China agrees to end six-month ban on U.S. pork imports.
10-22 - USDA: Frozen pork in storage up 1% on Sept. 30 from a year ago and a little more than expected.
10-20 - USDA: First U.S. hog confirmed to have H1N1 virus.
10-12 - USMEF: August pork exports -17% v. year ago.
9-25 - USDA: September 1st hogs and pigs were -2.3% from a year ago, less than expected.
9-22 - USDA: Frozen pork in storage +3% on August 30 from a year ago, less than expected.
9-11 - USMEF: July pork exports -13% from a year ago.
9-3 - USMEF survey: 20% of China's consumers believe that eating pork is dangerous due to the H1N1 virus.
Lumber
Fundamental Notes -
Lumber prices have been falling since early 2006 as the U.S. housing market deteriorated. On August 9, 2007, the sub-prime mortgage (and derivatives) problem turned into an international credit crunch and led to worst financial disaster since the Great Depression. Now, everyone is watching for signs of rebound in the housing sector, but progress has been slow.
In 2009, housing starts were down 39% at 553,800 units. That is a long ways from the 2005 peak of 2.068 million units and even from the annual average of 1.406 million units in the 1960's. In the first seven months of 2010, housing starts were up 10% from a year ago.
| U.S. Housing Starts (in thousand units)
| | Calendar Year | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010
| | Starts | 1,569 | 1,603 | 1,705 | 1,848 | 1,956 | 2,068 | 1,801 | 1,355 | 905 | 554 | 632e
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| U.S. Housing Starts (in thousand units)
| | Calendar Year | 1989 | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999
| | Starts | 1,376 | 1,193 | 1,014 | 1,200 | 1,288 | 1,457 | 1,354 | 1,477 | 1,474 | 1,617 | 1,641
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Key Events - Lumber
2010
9-2 - NAR: Pending home sales +5.2% in July and -19.1% from a year ago, better than expected.
8-25 - U.S. new home sales -12.4% in July and -32.4% from a year ago, much less than expected.
8-24 - NAR: Existing home sales were at an annual rate of 3.83 million units in July, down 27.2% on the month and much less than expected. Lowest sales in 15 years.
8-17 - U.S. housing starts +1.7% in July, but down 7.0% from a year ago, less than expected.
7-26 - U.S. new home sales +23.6% in June, but -16.7% from a year ago, better than expected. 210,000 new homes for sale in June is the smallest amount since 1968.
7-20 - U.S. housing starts -5.0% in June and -5.8% from a year ago, less than expected.
7-1 - NAR: Pending home sales -30% in May and down 16% from a year ago, much weaker than expected.
6-23 - U.S. new home sales -32.7% in May, much less than expected.
6-16 - U.S. housing starts -10.0% in May and +7.8% from a year ago, much less than expected.
6-2 - NAR: Pending home sales +6% in April and +22% from a year ago.
5-26 - U.S. new home sales +14.8% in April, more than expected.
5-18 - U.S. housing starts +5.8% in April and +40.9% from a year ago, more than expected.
5-4 - NAR: Pending home sales +5.3% in March and +21.1% from a year ago.
4-23 - U.S. new home sales +26.9% in March, more than expected.
4-16 - U.S. housing starts +1.6% in March, more than expected.
4-5 - NAR: Pending home sales up 8.2% in February and up 17.3% from a year ago, better than expected.
3-24 - U.S. new home sales down 2.2% in February, less than expected.
3-16 - U.S. housing starts -5.9% in February, but +.2% from a year ago.
2-26 - NAR: Existing home sales -7.2% in January, much less than expected.
2-24 - U.S. new home sales down 11.2% in January, less than expected and the lowest monthly total since records began in 1963.
2-17 - U.S. housing starts +2.8% in January, a little more than expected.
1-27 - U.S. new home sales down 7.6% in December, less than expected.
1-20 - U.S. housing starts were down 4.0% in December, but up slightly from a year ago.
1-12 - Earthquake in Haiti.
1-11 - Canada's housing starts +5.9% in December, more than expected.
2009
12-23 - U.S. new home sales -11.3% in November, much weaker than expected.
12-22 - NAR: Existing home sales +7.4% in November, more than expected.
12-16 - U.S. housing starts +8.9% in November and -7.3% from a year ago, as expected.
12-1 - U.S. pending home sales +3.7% in October, the highest level since March of 2006.
11-25 - U.S. new home sales up 6.2% in October, stronger than expected. +5.1% from a year ago.
11-23 - NAR: Existing home sales +10.1% in October to an annual rate of 6.10 million units, much stronger than expected. From a year ago, home sales were up 23.5%. Unsold inventory represents a 7-month supply, the lowest in over two years.
11-18 - U.S. housing starts down 10.6% in September and down 31% from a year ago, much weaker than expected.
11-6 - $8,000 homebuyer tax credit extended from December 1st through June 30, 2010.
11-2 - U.S. pending home sales up 6.1% in September to the highest level since December of 2006.
11-2 - Canada's Mortgage and Housing Corporation said that they expect housing starts to be up 16% in 2010.
10-28 - U.S. new home sales -3.6% in September, weaker than expected.
10-23 - U.S. existing home sales +9.4% in September to the highest level in two years.
10-20 - U.S. housing starts up .5% in September, but down 28.2% from a year ago, weaker than expected.
10-1 - U.S. pending home sales up 6.4% in August and 12.4% from a year ago, stronger than expected and the highest level since March of 2007.
9-29 - S&P 20-city index of home prices up for third consecutive month.
9-25 - U.S. new home sales up .7% in August, the most in 11 months, but less than expected.
9-17 - U.S. housing starts up 1.5% in August, but down 29.6% from a year ago, as expected.
9-3 - Canada's Mortgage and Housing Corp. expect housing starts to be up almost 6% in 2010.
9-1 - U.S. pending home sales index up 3.2% in July, the sixth consecutive month of positive gain and the highest reading in two years.
9-1 - Shanghai adopts new wood building code, will result in more imported lumber from Canada.
Live v. Lean?
Live hog prices are quoted in cents per pound and are the traditional terms used when talking about the actual hog markets. Lean hog prices are also quoted in cents per pound, but refer to the lean hog contract that trades at the Chicago Mercantile Exchange. The change began with the February of 1997
contract and is based on 40,000 pounds of pork which is equivalent to the meat from 220 hogs.
To convert a live hog price to a lean hog price, divide the live hog price by .74. So when the USDA says that the average price for cash hogs should
be 45 cents (for example), you will know that this is equivalent to 61 cents on the lean hog futures contract.
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