But while the future can’t be known for sure, there are certain trends that analysts look for when making market forecasts.

Heifer retention is a big one, said Lee Irvine, a beef specialist with ATB Financial, during a recent the Cattle, Commodities and Market Insights conference in Brooks, Alta.

“I watch it religiously, with every single kind of cattle on feed and placement side. That tells me where our numbers are at. If the heifers are hitting the feed yard, they’re not going to get bred back,” said Irvine.

However, a deeper dive into the numbers is necessary.

Heifer retention is down by approximately six per cent in the last cattle-on-feed reports.

However, the number jumps to 30 per cent when looking at the 600- to 800-pound weight category.

Irvine has not seen the latest cattle-on-feed reports from the United States because of the U.S. government shutdown, but is seeing similar trends there as well.

“So the question now that we can’t answer from a key performance indicator is, ‘OK, are those cattle going to stay on the ranch and actually go into the cow herd and continue to expand the cap, or are they just waiting until the fall to market them?’” Irvine said.

Checking the price of beef at the grocery store can help gauge consumer patterns, said Anton Bellot, director of agri-business and agri-food for ATB Wealth.

He last checked numbers that showed that for every dollar Canadians earn, they are $1.40 in debt.

“It is quite substantial, and that’s making a huge impact on the grocery shelves. That’s probably the number-one leading indicator I look at. Whether it’s on a beef producer, or on the cropping side, that commodity has to get value added to end up on a grocery store or in a restaurant,” said Bellot.

Canadian consumers have responded to American tariffs with “buy local” efforts, but in the end, he said, the price tag reigns supreme when family budgets are so tight.

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The U.S. Department of Agriculture, in monthly data issued after the close of trading on Friday, said producers placed 3.8 per cent more cattle into feedlots in October than a year earlier, below analysts’ expectations for a 4.9 per cent increase.

The increase indicates U.S. beef supplies will be more plentiful early in 2024 as the cattle grow heavy enough to be slaughtered, analysts said. Supplies will tighten later next year as fewer cattle will be available to place in feedlots and process into meat, they said.

Years of drought have reduced the U.S. herd, and dryness continues to drive producers to send cattle to slaughter because of a lack of grass available for grazing.

“We’re still culling the herd,” said Dennis Smith, commodity broker for Archer Financial Services.

Chicago Mercantile Exchange (CME) February 2024 live cattle futures slipped 0.15 cent to end at 176.65 cents/lb., though all subsequent contract months finished slightly stronger (all figures US$).

CME January 2024 feeder cattle closed 1.35 cents higher at 229.85 cents/lb. and hit the highest price since Nov. 9.

Cattle placements in Kansas, where 76 per cent of the state’s cattle are in abnormally dry areas, drove up overall U.S. placements. The state saw October placements jump 7.3 per cent from the previous year and it had 8.2 per cent more cattle on feed as of Nov. 1.

Nationwide, 11.9 million cattle were on feed for slaughter on Nov. 1, up 1.7 per cent from a year earlier and near analysts’ expectations.

“This is an artificially high placement number,” Smith said.

“This thing down the road is going to get tighter and tighter and tighter.”

In CME lean hog futures, the December contact slumped 0.625 cent to settle at 70.35 cents/lb.

China, the world’s biggest pork producer and consumer, had a bigger sow herd at the end of October than needed, state media reported.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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Traders kept an eye on Wall Street as weakness in stocks and concerns about the economy can limit consumer demand for pricey beef, analysts said. Stocks closed lower amid signs of economic resiliency that could encourage the Federal Reserve to keep interest rates at a restrictive level for longer than expected.

CME December live cattle ended down 0.1 cent at 179.325 cents/lb., while February live cattle fell 1.1 cents to 180.4 cents/lb. (all figures US$). January feeder cattle dropped 1.475 cents to 235.075 cents/lb.

“I’d put this on the back of the stock market,” said Rich Nelson, chief strategist for agricultural brokerage Allendale.

Live cattle and feeder cattle futures reached their lowest prices since June on Monday and Tuesday after the U.S. government, in a report issued after markets closed on Friday, said that producers placed more cattle than expected into U.S. feedlots in September.

The large placements surprised some analysts because U.S. cattle inventories dropped to their lowest levels in decades after drought raised costs for feed.

“The first and second quarter of next year will have a few extra cattle than we expected,” Nelson said.

Tight supplies of cattle and high beef prices have cooled U.S. beef exports, though sales increased last week. Weekly U.S. beef export sales were 17,400 metric tonnes for 2023, up 72 per cent from the prior four-week average, USDA said.

For pork, weekly export sales of 28,200 tonnes for 2023 were down eight per cent from the prior four-week average.

Most-active December lean hog futures finished 1.125 cents higher at 68.625 cents/lb. at the CME. February hogs rose 1.125 cents to 71.825 cents/lb. after notching contract lows during the previous four sessions.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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Futures prices collapsed on Monday after the U.S. Department of Agriculture, in a report issued after markets closed on Friday, said that producers placed more cattle than expected into U.S. feedlots in September.

“Monday’s washout was probably a bit overdone,” said Matt Wiegand, commodity broker for FuturesOne.

CME December live cattle settled up 0.8 cent at 179.425 cents/lb. on Wednesday. February live cattle finished 0.65 cent stronger at 181.5 cents/lb.

January feeder cattle rose 1.7 cents to 236.55 cents/lb.

Large placements of cattle in September surprised some analysts because U.S. cattle inventories have dropped to their lowest levels in decades after drought raised costs for feed.

But Friday’s data indicates the U.S. could eventually be headed for tighter cattle supplies and higher prices because producers are not yet holding back heifers from feedlots and slaughtering, analysts said. Retaining heifers would allow them to reproduce to rebuild the U.S. herd, they said.

“If we’re not retaining heifers, that could leave us even tighter on the back end,” Wiegand said.

In CME’s lean hog market, February and April futures set contract lows for the fourth consecutive day before settling higher. The market was oversold, analysts said.

Most-active December hogs edged up 1.125 cents to finish at 67.5 cents/lb. after hitting a contract low on Friday.

The U.S. Department of Agriculture estimated average hog weights were 285.2 lbs. in Iowa and southern Minnesota in the week ended Oct. 21, up from 283.5 lbs. a week earlier.

Separately, USDA said frozen pork supplies at the end of September were 14 per cent lower than a year earlier, while stocks of pork bellies were down 19 per cent.

On Thursday, traders will review weekly U.S. pork and beef export sales data.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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The market stabilized, however, after the February contract on Monday tumbled by the exchange-imposed daily trading limit. Trading limits for live cattle will revert back to the normal 6.75 cents on Wednesday after CME temporarily expanded them to 10 cents on Tuesday (all figures US$).

Cattle futures have reached record highs this year after drought and high feed costs drove U.S. ranchers to reduce the nation’s herd to its smallest in decades.

But the U.S. Department of Agriculture surprised livestock traders after markets closed on Friday by reporting larger-than-expected placements of cattle in U.S. feedlots in September. There were also more cattle in feedlots as of Oct. 1 than analysts estimated.

“It does appear to serve as a turning point of the industry’s perception of herd size direction over the next year,” brokerage StoneX said.

CME December live cattle settled up 0.275 cent at 178.625 cents/lb. after hitting its lowest price since June 22 at 177.3 cents. February live cattle finished down 0.125 cent at 180.85 cents/lb. and touched its lowest price since June 1 at 179.55 cents.

January feeder cattle ended 0.85 cent lower at 234.85 cents/lb. and reached their lowest price since June 21 at 233.875 cents.

Packers used the weakness in futures prices to buy some cattle at lower prices in the cash market, brokers said. Fed cattle traded in Iowa at around $184/cwt, down about $2 from last week, they said.

In CME lean hog futures, December futures edged up 0.2 cent to 66.375 cents/lb. after setting a contract low of 65.4 cents on Friday. The February, April, May and June 2024 contracts set new lows on Tuesday amid ample U.S. supplies.

The hog market looks oversold and due for a bounce, brokers said.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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Lean hog futures set contract lows.

The U.S. Department of Agriculture, in a monthly report issued after trading ended on Friday, said placements of cattle in feedlots during September totaled 2.21 million head, up 6.1 per cent from a year earlier. Analysts on average expected a 0.8 per cent increase.

As of Oct. 1, there were 11.6 million cattle in feedlots, up 0.6 per cent from 2022. Analysts estimated a slight decline from last year.

“The trade was just overall not expecting to see those numbers,” said Austin Schroeder, analyst for Brugler Marketing and Management.

CME December live cattle settled down 6.275 cents at 178.35 cents/lb. and hit its lowest price since June 26 at 178.175 cents (all figures US$). February live cattle tumbled by the daily exchange-imposed limit of 6.75 cents, to 180.975 cents/lb., and touched its lowest price since June 22.

January feeder cattle also hit their lowest price since June 22 and ended down 7.35 cents at 235.7 cents/lb.

After the sell-off, CME on Tuesday will temporarily expand daily trading limits to 10 cents from 6.75 cents in live cattle and to 12.25 cents from 8.25 cents in feeder cattle.

The markets still have a bullish longer-term outlook after drought and high feed costs caused ranchers to reduce their herds, Schroeder said.

“We’re not building back herd numbers just yet,” he said.

But the bigger-than-expected cattle placements likely have market participants rethinking the supply outlook for late winter and early spring 2024, Steiner Consulting Group said in a note.

In the hog market, December futures settled up 0.175 cent at 66.175 cents/lb. after setting a contract low of 65.4 cents on Friday. The February, April and May lean hog contracts set new lows on Monday.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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Hog futures were weaker on follow-through selling after Thursday’s sharp decline.

The August CME feeder cattle contract gained 3.275 cents, to 233.95 cents/lb., rising above its 40-day moving average (all figures US$). The contract closed off its session peak of 235.15 cents after facing resistance as it neared its 30-day moving average.

CME’s benchmark August live cattle contract settled down 0.375 cent at 170.775 cents/lb., settling below its 20-day moving average.

CME July hogs fell 0.575 cent, to 91.275 cents/lb. Most-active August hogs dipped 0.3 cent to close at 89.675 cents/lb.

The U.S. Agriculture Department on Friday morning said that export sales of beef totaled 13,300 metric tonnes in the week ended June 15, up slightly from the 13,000 tonnes reported a week earlier.

Pork export sales rose to 28,700 tonnes from 26,700.

After the close, USDA said the number of cattle on feed as of June 1 stood at 97 per cent of a year earlier. Analysts had been expecting 96.8 per cent.

The amount of cattle placed on feed during May was 105 per cent of the May 2022 total. That compares with market forecasts for 101.7 per cent.

Cattle marketed during May was 102 per cent of the year earlier total, above expectations for 101.6 per cent.

— Mark Weinraub is a Reuters commodities correspondent in Chicago.

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Hog futures snapped a three-session losing streak, the longest for the December contract in five weeks, while live cattle rebounded from its lowest since June 29.

CME December lean hogs rose 0.825 cent, to 67.025 cents/lb. (all figures US$).

CME December live cattle futures rose 0.1 cent, to 103.575 cents/lb.

But January feeder cattle fell 0.65 cent to 125.55 cents per pound.

Chinese customs data showed that the country imported 380,000 tonnes of pork in September, up 121.6 per cent from September 2019.

A U.S. Department of Agriculture report on Friday afternoon showed that the amount of U.S. cattle on feed as of Oct. 1 was 104 per cent of the year-earlier total. Analysts had been expecting 103.2 per cent.

Cattle placements and marketings during September both came in at 106 per cent of a year ago, topping forecasts for placements of 102.5 per cent and marketings of 105.8 per cent.

— Mark Weinraub is a Reuters commodities correspondent in Chicago.

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Persistent drought in the U.S. Plains withered winter wheat grazing pastures, which forced beef cattle into feedyards in states noted for growing corn such as Iowa and Kansas, said analysts.

“This is a dry weather story… and not great news for the trade,” said Allendale Inc chief strategist Rich Nelson, regarding USDA’s placement result that was near the high end of the range of analysts’ forecasts.

Larger cattle numbers means more beef tonnage around the late summer and early fall period, said Nelson.

Another factor behind February’s placement buildup was that packers paid feedlots enough for their cattle to turn a profit, which allowed them to buy calves to fatten, analysts said.

Monday’s Chicago Mercantile Exchange live cattle futures may open lower based on Friday’s report, said analysts.

But substantial market losses on Friday, partly tied to trade war fears, might lessen some of the report’s bearish implications, said analysts.

Most of Friday’s futures sell-off was on worries about a potential trade war between the U.S. and China in addition to increased near-term supplies, said Nelson.

“But I think there is more to go,” said Nelson regarding potential further market weakness come Monday.

USDA’s report showed February placements at 1.817 million head, up from 1.694 million a year earlier and above the average forecast of 1.766 million.

It was the largest placement result for the month of February since 1.82 million in 2002, according to analysts.

The government put the feedlot cattle supply as of March 1 at 11.715 million head, up 8.8 per cent from 10.772 million a year ago. Analysts, on average, forecast a 8.2 per cent increase.

USDA said the number of cattle sold to packers, or marketings, were up 1.6 per cent in February from a year ago to 1.675 million head.

Analysts had projected a 1.2 per cent rise from 1.648 million last year.

Katelyn McCullock, senior economist with the Livestock Marketing Information Center, said the southern Plains continued to see some drought impacts based on lighter-weight animals going into feedlots — including feeder cattle arriving from Mexico.

“The cattle that are coming in across the border are going straight to feedlots as opposed to onto pasture or on some forage,” said McCullock.

— Reporting for Reuters by Theopolis Waters in Chicago.

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Cattle placements rose about three per cent from August in 2016, USDA said. Analysts polled by Reuters had predicted a decline of nearly three per cent.

The placements were the largest for August since 2012 and the largest overall since May of this year, when 2.119 million cattle moved into feedlots, according to USDA data.

“It means there’s more beef ahead of us,” said Linn Group analyst John Ginzel, who had predicted a placement spike of 104.3 per cent when most other analysts anticipated a decline.

Cattle placed on feed in August should reach slaughter weight in the first quarter of 2017.

“It’s a negative report… and most negative for the February and April time slots,” said U.S. Commodities analyst Don Roose.

Roose predicted Chicago Mercantile Exchange cattle futures would open 0.5 cent to one cent lower on Monday. CME October live cattle on Friday reached a roughly 1-1/2 month high, settling up 1.475 cents at 111.575 cents/lb., rising in part on expectations that the USDA data would be bullish.

USDA said a total of 10.5 million cattle were on feed as of Sept. 1, up four per cent from a year ago. That also was more than pre-report estimates for 10.409 million cattle, or 102.7 per cent of last year. Marketings of cattle in August totaled 1.98 million head, up six per cent from a year ago but near forecasts for an increase of 5.8 per cent.

In a separate monthly cold storage report, USDA said 476.26 million lbs. of beef were in storage as of Aug. 31. That is up from 431.84 million lbs. at the end of July and estimates from a few analysts for 426.5 million lbs.

— Michael Hirtzer reports on commodity markets for Reuters in Chicago.

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