Cattle futures, hog futures, and lumber futures market information.

Chart Comments

Long-term (not shown): U.S. cattle inventory is at its lowest level in 50 years. From 1987 to 2003, cattle traded between roughly 60 and 80 cents. Since 2004, the range has been between roughly 75 cents and $1.00. Prices have been hurt by the financial crisis, but so far, they have held above 80 cents (updated 5-29-09).

Daily (below): U.S. cattle inventory is at its lowest level in 50 years and the world's economy should soon be emerging from its present slump. Cattle prices have been down since last fall, but are starting to show signs of significant life. It looks bullish to me (updated 6-22).

Cattle chart

Key Events - Live cattle

2009
6-19 - June 1st cattle on feed are down 3.8% from a year ago, less than expected.
6-12 - USMEF: U.S. beef exports up 1% in April.
5-22 - May 1st cattle on feed are down 2.8% from a year ago and a little more than expected.
5-18 - Canada's 16th confirmed case of mad cow disease since 2003 in a six-year old dairy cow in Alberta.
5-14 - USMEF: U.S. beef exports up 10% in the first three months of 2009 from a year ago.
4-17 - April 1st cattle on feed are down 4.6% from a year ago, as expected.
4-13 - USMEF: U.S. beef exports up 11% in the first two months of 2009 from a year ago.
3-20 - March 1st cattle on feed are down 5.3% from a year ago and less than expected.
3-18 - USDA says: "it will become more difficult for packers to obtain cattle at lower prices as supplies of market-ready fed cattle become more limited over the next several months."
3-16 - USMEF: U.S. beef exports up 13% in January from a year ago.
2-20 - February 1st cattle on feed down 5.7% from a year ago, as expected.
2-12 - USMEF: U.S. beef exports up 35% in 2008.
1-30 - USDA: January 1st cattle inventory is down 1.6% from a year ago, less than expected and the lowest since 1959.
1-23 - January 1st cattle on feed are down 7.1% from a year ago and less than expected.

2003
12-24 - Mad cow disease in the U.S.
5-20 - Mad cow disease confirmed in Canada.

Fundamental Notes -

The discovery of mad cow disease in the U.S. at the end of 2003, hurt U.S. beef demand, but world demand keeps rising and foreign customers are slowly coming back. In 2009, concerns about the world's economy have kept cattle prices low during while cattle inventories are at a 50-year low.

On June 10, 2009, the USDA said that they expect beef production to be down slightly in 2009 and so far, it is down 4% from a year ago. They reduced their estimate of the 2009 average steer price from 86.5 to 85.5 cents per pound. For 2010, they expect beef production to be down 2% and choice steers to average 90.5 cents per pound. On June 11, 2009, the U.S. Meat Export Federation said that U.S. beef exports in the first four months of 2009 were up 7% from a year ago after posting a 35% gain in 2008.

The June 1st cattle on-feed inventory was 10.407 million head, down 3.8% from a year ago and less than expected. May placements were down 14% and marketings were down 9% from a year ago. As of January 1, 2009, the U.S. cattle and calf inventory totalled 94.49 million head, down 1.6% from a year ago and less than expected.

Chart Comments

Long-term (not shown): 1998 was the worst year for hog producers since the Great Depression and so far, 2009 is not looking much better. Prices were already hurting from the world's economic problems and then on April 27, 2009, the H1N1 virus (a.k.a. swine flu) became an international health concern. Since 2003, prices have traded between 50 and 80 cents and, so far, they are still holding within that range (updated 6-26-09).

Daily (below): On April 27, 2009, an outbreak of "swine" flu in Mexico became an international health emergency, sending prices to new contract lows. The flu is not spread by eating properly-cooked pork, but it will take time to heal the fear. So far, prices are still below the 125-day average (updated 6-26).

Lean hogs chart

Key Events - Lean hogs

2009
6-26 - USDA: June 1st hogs and pigs are -2.0% from a year ago, as expected.
6-22 - USDA: Frozen pork in storage up .8% from a year ago, less than expected.
6-12 - USMEF: U.S. pork exports down 19% in April.
6-11 - World Health Organization declares H1N1 outbreak to be a pandemic.
5-22 - April 30th frozen pork supplies down 7% from a year ago, a little more than expected.
5-14 - USMEF: U.S. pork exports down 3% in the first three months of 2009 from a year ago.
5-8 - Mexico's Ag Minister says there is no evidence of disease among Mexico's hog population.
5-4 - First hogs confirmed with H1N1 virus are on a farm in Alberta, Canada. The apparently got it from their owner after he returned from Mexico.
4-28 - Canada's April 1st hog inventory is down 8.6% from a year ago.
4-27 - World Health Organization declares the outbreak of swine flu in Mexico is an international health emergency. CDC immediately says that the flu cannot be caught from eating properly cooked pork, but the public image is already damaged.
4-24 - First mention of swine flu in Texas and California.
4-22 - USDA: March 31st frozen pork inventory down 10% from a year ago, less than expected.
4-13 - USMEF: U.S. pork exports down 7% in the first two months of 2009 from a year ago.
3-31 - USDA buys $25 million of pork to help the industry.
3-27 - March 1st hogs and pigs are down 2.7% from a year ago, but a little more than expected.
3-17 - HBO special: "Death on a Factory Farm" airs and increasing press about the over-use of antibiotics in pork production.
3-16 - USMEF: U.S. pork exports down 4% in January from a year ago.
2-12 - USMEF: U.S. pork exports up 49% in 2008 - a new record high for the 17th consecutive year.
1-22 - USDA says: "Recession-squeezed consumer budgets will likely constrain increases in pork and hog prices this year, despite expected reductions in production foreshadowed by the December 1 Quarterly Hogs and Pigs (report)."

Fundamental Notes -

Hog prices were already suffering from the world's economic slowdown when they got hit on April 27, 2009 by the World Health Organization's announcement that an outbreak of swine flu in Mexico had become an international health emergency. Fair or not, the immediate public perception was that hogs were dangerous. The U.S. Center for Disease Control points out that swine flu is not acquired by eating properly cooked pork, but it will still take time for consumers to trust again.

On June 10, 2009, the USDA reduced its 2009 price estimate for barrows and gilts from 45.5 to 44.0 cents per pound (59.5 cents lean). In 2009, the USDA expects pork production to be down 3% and so far, it is down 3% from a year ago. For 2010, the USDA expects pork production to be down 2% and the price of barrows and gilts to average 49.5 cents per pound (67 cents lean). On June 11, 2009, the U.S. Meat Export Federation said that pork exports in the first four months of 2009 were down 8% from a year ago after posting a 49% increase in 2008.

The June 1st count of all U.S. hogs and pigs was 66.079 million head, down 2.0% from a year ago, roughly as expected. The December to May pig crop was down .4% from a year ago. Frozen pork inventory as of May 31, 2009, totaled 584 million pounds, up .8% from a year ago. Frozen bellies totaled 79 million pounds, down 9.5% from a year ago.

Chart Comments

Long-term (not shown): Lumber prices have had support at $200 per thousand board feet since 1992, but that gave way under the weight of a weak housing market and slowing economy. Half-way through 2009, the economy is doing better, but housing is slow to rebound. New range at $150 to $300? (updated 7-1-09).

Daily (below): On May 27, 2009, prices closed above the 125-day average - a sign of strength. On the next day, they posted their highest close in four months - even more impressive. The housing market may be improving some, but so far, the data is not overly impressive. How high will lumber prices go? (updated 6-25).

Lumber chart

Key Events - Lumber

2009
6-24 - U.S. new home sales down .6% in May, much less than expected.
6-23 - U.S. existing home sales up 2.4% in May, less than expected.
6-16 - U.S. housing starts up 17% in May, much stronger than expected.
6-2 - Index of pending home sales increased from 84.6 to 90.3 in April, the biggest monthly gain in over seven years and much stronger than expected.
5-19 - U.S. housing starts down 13% in April, much less than expected.
5-18 - CNBC says several regional bankers are telling them that there are signs of recovery in the housing market.
5-8 - Canada's housing starts down 20% in April, much weaker than expected.
5-5 - Fed Chairman Bernanke says that housing slump may be about over.
4-16 - U.S. housing starts down 11% in March, less than expected.
4-8 - Canada's housing starts up 14% in March, much more than expected.
3-17 - U.S. housing starts up 22% in February, more than expected.

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 problem turned into an international credit crunch and the resulting financial disaster has made the outlook for housing demand even worse. One unexpected piece of news lately is that China has been buying more lumber from Canada because of Russia's decision to charge a 25% export tax on logs that increased to 90% in January of 2009.

Its been over three tough years for the housing market, but conditions may be slowly stabilizing. In the first five months of 2009, new home sales were down 38% from a year ago. 2008 new home sales were down 38% after declining 26% in 2007 and 17% in 2006.

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.

Dailyfutures.com

Live cattle, Lean hogs, and Lumber Markets

Live v. Lean?