Carcass weights and slaughter volumes

Oct 06, 2020

Provincial livestock market analyst Jason Wood looks at the latest numbers as of September 29, 2020.

‘Canadian steer carcass weights have been trending in line with the long-term average over the last 12 weeks,’ explains Wood. ‘Seasonally, steer carcass weights are stable through the first quarter, then decline to a low in late May-early June before peaking in late October-early November.’

He says that carcass weights rose in late April following COVID-19 disruptions that significantly reduced weekly beef processing capacity over a 7 week period. During a 3 week period at the beginning of May, steer carcass weights rose 28 lbs to 926 lbs, above average for that time period.

‘Western Canada slaughter volumes recovered with weekly volumes over the last 4 months, routinely exceeding weekly slaughter volumes from a year ago,’ he says. ‘As weekly slaughter rates returned to pre-COVID-19 levels, carcass weights declined to the long-term trend by the beginning of July.’

For the week ending September 19, 2020, steer carcasses averaged 938 lbs, up 19 lbs from the previous week and 15 lbs higher than the 5-year average.

‘This increase in weekly carcass weights should be monitored but market conditions, backlog and lift times are factors,’ he notes. ‘Year-to-date, steer carcass weights are averaging 904 lbs, one pound higher than in 2019 and 9 lbs higher than the 5-year average.’

Western Canada cattle slaughter to mid-September is 1.687 million head, 6.4% below 2019 but up 6.7% compared to the 5-year average.

‘Year-over-year, steer slaughter is down 3.7%, heifer slaughter is down 1.6%, cow slaughter is down 24%, and bull slaughter is down 27.2%,’ he adds. ‘Canadian beef production, to the week ending September 19, is down 5% at 1.86 billion lbs compared to 2019.’

Source : alberta.ca

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.