Over nine consecutive sessions, the December oat contract at Chicago pushed higher by 29.5 U.S. cents per bushel, closing Monday at US$4.0375/bu. The next two days saw a correction as the price tumbled by more than 20 U.S. cents, with the December closing at US$3.795/bu.

Meanwhile, Prairie Ag Hotwire tracked oat prices across Western Canada at $4.30-$5.26/bu. delivered on Oct. 19 and at $4.30-$5.55 on Monday, with the same prices the day after.

That phenomenon wasn’t confined to the recent shifts in oats, as Ryan McKnight of Linear Grain at Carman, Man. explained.

“That’s due to some market participants not hedging oats anymore. There’s a looser correlation to the oat futures but because the oat futures are liquid, you can see erratic moves one way or the other,” he said. “I’ve noticed that cash prices stick for a while, but they do follow the futures up or down.”

Mills and feed markets in the U.S. are quite often able to acquire oats for less than their Canadian counterparts, he noted.

“Canadian mills tend to have to pay eventually what the farmer wants for them, because there’s just not the warehouse storage like there is in the U.S.,” McKnight said.

In turn, that will sometimes mean “Canadian mills will be more aggressive in the short crops,” he said.

Another factor McKnight cited was the small volume in oat trading at CBOT. When compared to canola, corn, soybeans or wheat, the activity in oats is a very small fraction. That limited trading means one trader can easily affect the market.

“Linear Grain can push the oat market around just by our hedges,” he said.

While some in the oat industry would prefer if the commodity was taken off CBOT, McKnight said he firmly believes it needs to stay.

“It’s better if there’s a futures market for things. Buyers can make some their margins off of basis movements. In my opinion costs go up without futures markets,” he said.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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Expectations for higher cash prices this week and beyond helped to underpin futures, analysts said. Cash prices improved on Friday, compared to the middle of last week.

CME October live cattle futures expired at 183.75 cents/lb., down 0.375 cent (all figures US$). That was the highest contract expiration ever for live cattle, according to AgMarket.Net and The Beef blog.

Cattle futures set record highs this year as the U.S. herd dwindled to its lowest levels in decades.

December live cattle on Tuesday rose 0.3 cent to close at 183.55 cents/lb., after falling to June lows last week. The contract ended down 2.3 per cent for the month after recent fund liquidation, traders said.

CME January feeder cattle closed up 0.325 cent at 237.2 cents/lb., after touching its lowest price since May on Friday. The contract lost a whopping eight per cent for the month.

Demand for U.S. beef is expected to improve heading into the winter holiday season, analysts said. Tight cattle supplies are still squeezing beef processors, though.

Processors lost $16.40 for each head of cattle they slaughtered on Tuesday, compared to losses of $60.20 per head a week ago, HedgersEdge.com said. Margins for pork processors improved to positive $24.75 per hog from $19.95 per hog a week ago.

In CME lean hog futures, the December contract closed up 0.55 cent at 71.725 cents/lb. while staying within Monday’s trading range. The contract slipped 0.1 per cent for the month.

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

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“I think as we get going, (prices) are going to lower down quite a bit,” Mike Fleischhauer of Eagle Commodities Ltd. at Lethbridge said. “The corn market over the next six months is going to go down 20 to 25 per cent. That will pull back the feed wheat and barley, for sure.”

Despite the warmer weather, corn from the United States is still arriving at feedlots “in droves” according to Fleischhauer.

“(Corn’s) price is quite a bit cheaper than feed wheat and feed barley. They have enough right now to get into new crop and then we’ll see where it goes from there,” he said.

Fleischhauer has seen corn bids at $365 per tonne ($9.27 per bushel), as well as bids for feed barley at anywhere between $390-$395/tonne ($8.49-$8.60/bu.). However, there are other factors which will affect pricing, including weather.

“It all depends too on what we have coming for weather,” he said. “For the most part, southern Alberta and southern Saskatchewan has been getting some timely moisture. I know central Alberta and central Saskatchewan’s a little bit different but they’ve just finished up seeding over the last 10 days. Hopefully, they can get some timely rains up there, as well.”

The high-delivered bid for feed barley in Alberta as of Wednesday was $9.04/bu., 11 cents less than last month, according to Prairie Ag Hotwire. In Saskatchewan, the high-delivered bid was unchanged from last month at $7.75/bu., while in Manitoba, it was 37 cents lower than one month ago at $6.88/bu.

For feed wheat, the high-delivered bid in Alberta was $11.43/bu., down 14 cents from last month. In Saskatchewan, it was $10/bu. (down 75 cents) and in Manitoba, the high-delivered bid was $9.71/bu. (down 21 cents).

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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CME June lean hog futures settled down 2.325 cents at 84.875 cents/lb. and the July contract fell 2.575 cents to end at 85.55 cents (all figures US$).

Cash hogs continue to trade at a significant discount to futures. The CME lean hog index, a two-day weighted average of cash hog prices, rose by 67 cents, to $77.17 per hundredweight (cwt), its highest since March 22, but still the equivalent of nearly $8/cwt below futures.

On the pork side, the U.S. Department of Agriculture (USDA) priced the carcass cutout late Wednesday at $83.07/cwt, down 68 cents from Tuesday.

“Until the cash (market) can move up more aggressively and the cutout can move up, the upside is limited,” said Don Roose, president of Iowa-based U.S. Commodities.

Traders await USDA’s weekly export sales report on Thursday for a gauge of export demand for U.S. pork and beef.

CME live cattle futures closed mixed, with the most-active nearby contracts finishing higher and back months drifting lower. June live cattle settled up 0.95 cent at 164.825 cents/lb., and benchmark August futures ended 0.65 cent higher at 163.125 cents.

CME August feeder cattle finished down 0.325 cent at 231.15 cents/lb.

Boxed beef prices continued to retreat, with choice cuts priced on Wednesday afternoon at $298.15/cwt, down $1.32 from Tuesday, and select cuts at $282.89/cwt, down $1.46.

Ahead of Friday’s monthly USDA Cattle on Feed report, analysts surveyed by Reuters on average expected the government to report the number of cattle in U.S. feedlots as of May 1 at 96.5 per cent of a year ago, or about 11.6 million head.

Analysts on average estimated April feedlot placements at 96.3 per cent of a year ago and April marketings at 90.3 per cent of a year ago.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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Economic worries increased after the failure over the weekend of First Republic Bank. Wall Street stock indexes sagged ahead of the Federal Reserve’s interest rate decision on Wednesday and as investors worried the U.S. government could run out of cash after June 1 without a debt ceiling hike.

Front-month live cattle futures touched their lowest price since March 24, after tightening supplies drove the now-expired April contract to an all-time high of 177.7 cents/lb. on April 13 (all figures US$). The most-active June contract on Tuesday ended down 1.975 cents at 162.9 cents/lb.

“Behind everything, there’s still tightening cattle supplies,” said Doug Houghton, analyst for Brock Associates. “The market is probably going to be volatile, and it may correct more than it should based on the fundamentals.”

Lower prices in the cash market helped pressure futures, Houghton said, noting that some light trading of $172 per hundredweight in the southern Plains and Kansas was down $1 from last week.

“The cash market seems to have probably topped out here seasonally,” Houghton said. “Normally we’re going to get some weakness from late spring in to summer.”

CME August feeder cattle sank 3.925 cents to end at 226.175 cents/lb.

Boxed beef prices were also weaker, with choice cuts slipping by 78 cents to $309.24 per hundredweight and select cuts dropping by $2.34 to $288.66 per hundredweight, U.S. Department of Agriculture (USDA) data showed.

Meatpackers slaughtered an estimated 127,000 cattle, down from 128,000 cattle a week ago but up from 126,000 cattle a year ago, the USDA said separately. Packers reduced the number of swine slaughtered for meat to 459,000 hogs from 470,000 hogs a week ago and 481,000 hogs a year ago.

CME June lean hogs rose 0.25 cent to 89.95 cents/lb.

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

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Meatpackers had to be aggressive in the cash market, brokers said, after ranchers have reduced their herds due to high feed costs and drought in the western U.S.

Cattle have sold for $177-$178 per hundredweight in the cash market in Nebraska since futures markets closed on Wednesday, up from about $170 per hundredweight last week, said Rich Nelson, chief strategist for commodity broker Allendale (all figures US$).

“We had a cash cattle market explode, specifically for the north,” Nelson said. “I certainly was quite surprised.”

CME April live cattle futures ended up 2.675 cents at 171.075 cents/lb., after setting a contract high of 171.425 cents/lb. June live cattle finished 2.8 cents higher at 163.1 cents/lb. and reached a contract high of 163.225 cents/lb.

Further gains in futures will be led by cash prices, Cassie Fish, an analyst and beef industry expert, said on The Beef blog. She predicted wholesale beef prices will have the next sharply higher move of values.

“Packers scrambled to cover needs from a pool of market-ready fed cattle too small to supply them,” Fish said.

Prices for choice cuts of beef shipped to wholesale buyers in large boxes rose $1.03 on Thursday, to $289.65 per hundredweight, while prices for select cuts declined, the U.S. Department of Agriculture (USDA) data showed.

Packers slaughtered an estimated 122,000 cattle, compared with 126,000 cattle a week ago and 121,000 cattle a year ago, USDA said separately.

“It appears that packers remain short bought and we can probably say the same thing for beef buyers,” Steiner Consulting Group said.

CME feeder cattle futures also climbed, with the May contract settling up 3.3 cents at 205.4 cents/lb.

CME April lean hog futures ended up 0.75 cent at 74.15 cents/lb., after setting contract lows this week. Most-active June hogs continued lower, down 0.2 cent at 88.175.

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

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Cash cattle trades of around $170-$171/cwt in western Nebraska and around $172/cwt in northwest Iowa ignited the rally in futures, analysts said (all figures US$).

Cash prices were up about $5 from last week, said Don Roose, president of brokerage U.S. Commodities.

The cash trade represented new highs for 2023, Cassie Fish, an analyst and beef industry expert, said on The Beef blog.

“This week’s trade is blowing the roof off as packers scramble to cover slaughter needs amid tight market-ready fed cattle supplies,” Fish said.

Supplies have tightened as producers have reduced their herds due to drought and high feed costs, raising costs for beef processors.

Meatpackers slaughtered an estimated 126,000 cattle, up from 124,000 cattle a week ago and 120,000 cattle a year earlier, the U.S. Department of Agriculture (USDA) said.

Estimated margins for processors dropped to $47.65 per head of cattle from $52.45 on Wednesday and $67.85 a week ago, according to HedgersEdge.com LLC.

CME April live cattle settled up 1.725 cents at 167.55 cents/lb. and reached a contract high of 167.65 cents. June cattle jumped 1.35 cents. to 161 cents/lb.

Feeder cattle also finished higher, with the April contract rising 1.7 cents, to 199.9 cents/lb.

In the CME hog market, front-month April futures eased 0.325 cent to 76.45 cents/lb. June hogs rose 0.775 cent to 91.6 cents/lb.

USDA, in a quarterly report, said the U.S. hog herd totaled 72.9 million head on March 1, up 0.2 per cent from a year ago and in line with analysts’ expectations.

Hog producers intend to have 2.97 million sows farrow from June to August, down three per cent from a year earlier, USDA said. Analysts estimated farrowing intentions would rise 0.1 per cent for that period.

The farrowing intentions look supportive for futures, Roose said.

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

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“The cash price outlook right now is very firm,” said Doug Houghton, technical analyst at Brock Capital Management. “The overall supply outlook is for tightening supplies and higher prices.”

CME benchmark April live cattle futures added 0.1 cent, to 163.7 cents/lb., while front-month February live cattle gained 0.225 cent, to 160.8 cents (all figures US$).

The front-month live cattle contract climbed to 161.5 cents, its highest on a continuous basis since April 29, 2015.

CME March feeder cattle futures eased 0.75 cent, to 186.45 cents/lb.

Live cattle traded steady-to-firmer across the U.S. Plains, with some trade in Kansas as high as $159 per hundredweight (cwt), the U.S. Department of Agriculture said.

Meat prices were mixed-to-lower, with select cuts easing $4.17, to $253.16/cwt, while choice cuts firmed 48 cents, to $267.20/cwt, USDA said.

Hogs firmed after dipping to 13-month lows yesterday, as packers continue to catch up from backlogs in market-ready supplies around the beginning of the year.

“Hog slaughter, which has been running above expectations the last few weeks, may be slowing as supplies tighten,” Houghton said.

Packers processed 482,000 head on Wednesday, down 8,000 from the same period a week ago, USDA said.

Most-active April hogs added 0.8 cent to 84.075 cents/lb., while June hogs gained 1.35 cents, to 102 cents.

The CME’s Lean Hog Index, a two-day weighted average of cash hog prices, last traded up 22 cents to $73.51/cwt.

— Reporting for Reuters by Christopher Walljasper in Chicago.

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“We’re going to have more supply coming at us, and that’s putting pressure on the wholesale market,” said Altin Kalo, economist at Steiner Consulting Group.

CME October lean hogs fell 4.75 cents, to 93.3 cents/lb., dropping 4.84 per cent (all figures US$).

Wholesale pork prices eased early in the session but recovered by the end of day, with pork carcasses adding $1.44, to $119.91/cwt, USDA said.

The CME’s lean hog index, a two-day weighted average of cash hog prices, shaved 44 cents to $120.62/cwt.

U.S. exporters sold 13,500 tonnes of pork during the week ended Aug. 11, down 43 per cent from the prior four-week average, USDA said.

“The export numbers that came out this morning were not very encouraging. Sales to China were almost non-existent, so I think that added to the downward pressure,” said Kalo.

Live cattle futures also eased, pulled lower by softening cash values in the southern U.S. Plains.

“Even though you have pretty strong prices in parts of the country, the average price keeps getting dragged lower by what’s happening in the south,” said Kalo.

CME October live cattle futures lost 1.1 cents to 144.75 cents/lb., while CME September feeder cattle futures fell 1.85 cents, to 185.275 cents/lb.

Cash cattle prices in the southern U.S. Plains traded around $141/cwt, discount to the northern Plains, which traded steady at $148/cwt.

Wholesale beef prices were steady-to-softer, with select cuts slimming 42 cents, to $237.47/cwt, while choice cuts firmed five cents, to $264.39/cwt.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.

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Canola, he explained, has generally done the opposite of the Chicago soy complex — which the Canadian oilseed normally follows.

‘ICE canola’s May contract on Tuesday lost about $38 per tonne at one point, he noted, and while it regained a good amount of strength, closing with a $9 loss, the soy complex remained weaker.

“Canola is really a dysfunctional future right now,” Palmer said.

“The funds of course are long on canola. They got spooked. They liquidated a good chunk of their position yesterday.”

There has also been very little farmer selling, according to Palmer. Farmers are essentially out of old-crop canola, but are holding back about 10 to 20 per cent of it in hopes of cash prices hitting $30 per bushel. Price and Data Quotes cited cash prices between $24-$25 per bushel on Wednesday.

Also, he said, only the locals and the algorithms were playing the market — and commercials were not trading, for the most part.

“[They] will only if they buy from the farmers and put in a hedge,” Palmer said, noting the commercials weren’t speculating on the spreads or the flat price.

No one wants to get caught short, he said, especially with such record-high prices for canola.

“There still could be a tremendous squeeze on the July/November spread,” he said.

Going into spring planting, the analyst said the coming crop is based on a successful season with sufficient moisture to produce an average to above-average harvest. Canola, he emphasized, cannot afford another drought on the Canadian Prairies.

“These prices are going to stay here, unless the whole picture changes. That means the war [in Ukraine] gets settled, North American gets a huge crop and you run the funds to the downside.”

— Glen Hallick reports for MarketsFarm from Winnipeg.

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