The National Livestock Weekly October 20, 2003 • Vol. 83, No.1 “The Industry’s Largest Weekly Circulation” www.wlj.net • E-mail: [email protected] • [email protected] • [email protected] A Crow Publication Cash shakes up CME Remarkable! — Last Wednesday increased to $110, $179 feds 500 point limit. Fed cattle prices made another remarkable rally last week. Most fed trade was at $109 live, — ‘Short’ hedgers relieved, $179 dressed. Analysts said last week’s mar- ‘long’ speculators disappointed. kets showed the largest week-to-week advances By Steven D. Vetter ever, with some reports of $14 gains live, $25 WLJ Editor dressed, compared to two weeks ago. Cattle feeders continue to have the upper In response to the record wide $8-15 price spread between cash fed cattle and live cattle fu- hand, but packers are cautiously monitoring tures, the Chicago Mercantile Exchange (CME) production schedules to limit supply and hold approved emergency rules allowing for a wider their margins. daily trading limit on live cattle contracts. Futures The futures markets continued to rally and traders indicated they understood why the move opened Monday with another limit up trading was made, but said extreme caution should be not- day. The recent rally prompted the Chicago ed. Mercantile Exchange (CME) to increase daily Starting last Wednesday, October 15, the max- price limits to $5 Wednesday, and $3 Thurs- imum daily move was increased from the normal day in order to bring the cash/futures basis 150 points per contract to 500 points. However, back in line, which was in the $8-10 range. This the 500-point maximum move can be dropped to gave hedged traders the opportunity to lift a lower level pending certain circumstances, and their hedges and place those cattle on the cash the 150-point move is still in play. market, which they did. The October contract According to CME sources, the normal 150-point This year’s fall bull sale season has been a rousing suc- fell several dollars to $99.92 Thursday. By the move is in effect unless the following occurs: cess across the U.S. Most sales, regardless of breed, have end of the week, packers were bidding $102 for If either of the two contracts, in the even shown averages ranging between $2,200-2,500, with sev- cash cattle, thinking the market had topped out. month cycle nearest to expiration, settle on the eral reputation outfits showing even greater gains from Boxed beef trade saw a big rally, with Choice limit bid or limit offer for two successive days, the last year. Bull producers were anticipating cowherd re- product finding a new high at $200.19 and Se- daily trade limit will be raised to 300 points (three population, which meant more bulls would be needed lect trading at $178.69. Trade volume was ex- cents per pound) for all contract months; during the breeding season. — Photo by Dick Crow tremely light as wholesalers are working on a See CME on page 8 hand-to-mouth basis. Packer offers were high- er as they felt confident of manageable inven- tories. Boneless beef markets also advanced sharply; New E. coli interventions available 90 percent boneless moved up to $133.21. The Editor’s note: This is the first ods for E. coli prevention, and The evaluation was per- reducing the prevalence of E. 50 percent trim market was at $99.47, estab- story in a three-part series con- how well do they work? formed at an eastern Colorado coli O157H:7 in feces and on lishing a new high. The fifties were in the $50 cerning new pre-harvest E. coli Answering these questions feedlot this past spring. Be- hides of market-ready feedlot prevention technologies. range three weeks ago. Slaughter cow values was the focus of a recent check- tween March 1 and May 26, cattle. By Sarah L. Roen are expected to start escalating. The latest cow off-funded live animal trial con- 2003, researchers collected The first pen of cattle was beef cutout value was $106.86. WLJ Associate Editor ducted by Colorado State Uni- 1,172 fecal and hide samples the control group. These cattle Formula traders were in a predicament last The beef industry is shifting versity (CSU). The trial looked from 24 pens of cattle. Each weren’t given any treatment. week with Thursday’s average formula sale its focus on E. coli O157:H7 in- at the three types of pre-harvest pen had approximately 200 The second pen of cattle were at $148.82 on just over 15,000 head, averag- terventions back to feedlot and interventions — microbial feed head of cattle weighing 925 fed the microbial feed product ing 778 pound carcasses. Live cash prices producer levels. The theory is additives, antimicrobial feed pounds. for 90 days. The third pen was ranged between $101-120 on steers and $100- if E. coli O157H:7 can be elim- additives, and a vaccine. The eight variations of the fed the antimicrobial feed ad- 112 on the heifers. Dressed values were between inated or reduced on cattle pri- “Eight variations on the three treatments, mentioned ditive for three days pre-slaugh- $170-188 on both steers and heifers. Live trade or to reaching packing plants, treatments were studied since by Belk, were randomly allo- ter. The fourth group of cattle volume was good for the week with 218,000 there will be less of a chance for the three interventions were cated and replicated three times was vaccinated 60 and 30 days head moving as of Thursday. Packers had the pathogen to be transferred tested singularly and sequen- to ensure accurate results. The prior to slaughter. The fifth 262,600 head delivered through Wednesday, onto meat and passed to the tially,” said Keith Belk, CSU key finding in the study is pre- group of cattle was vaccinated 15,000 head lower than a week earlier. consumer. professor and facilitator of the harvest pathogen mitigation and fed the microbial feed ad- See Markets on page 13 But, what are the best meth- research. strategies can be effective in See E. coli on page 9 Record corn harvest expected U.S. Corn Yield Report — Sub-$2 possible Agricultural Statistics Service er than last year. late fall, winter. (NASS), corn production is fore- Other top-ten producing For top 10 producing states cast at 10.2 billion bushels, up states, expected to show sig- — Soybean produc- three percent from September’s nificant yield increases, are tion down; cattle projection, and 13 percent high- Ohio, 70 bushels; Indiana, 27 impacts minimum. er than the 2002 crop. Yields bushels; Nebraska, 15 bushels; 150 are expected to average 142.2 Michigan, 14 bushels; South By Steven D. Vetter bushels per acre, up 3.7 bushels Dakota, 10 bushels; and WLJ Editor from September’s projection, Kansas, seven bushels. USDA’s most recent crop pro- and 12.2 bushels larger than The yield gains are expected duction projections indicate last year. to more than make up for yield livestock producers could dish If realized, records would be decreases in Iowa, nine bushels; 100 out even less money for feed set for corn production and Minnesota, 14 bushels; and corn through the rest of the fall yield. The previous record was Texas, two bushels. and early winter. Lower prices in 1994, when total production While being called bearish Bushels per acre could result in even higher hit 10.1 billion bushels, and av- for corn farmers, the data was Source: National Ag Statistics Service money paid for calves and year- erage yields were 138.6 bushels called bullish for livestock pro- ducers. Analysts last week pro- 50 lings. per acre. IA IL NE MN IN SD KS OH MI TX Despite a drier-than-normal According to NASS, the hot See Corn on page 7 July and August, USDA’s Oc- and dry August weather did- Actual '02 yields '03’03 ProjectionProjections (as (as of of Oct. Oct. 1) 1) tober 10 crop production report n’t affect corn crops as much as showed a record corn harvest experts originally feared, par- Seven of the top ten producing corn states will show significantly larger corn yields this is within reach. Soybean pro- ticularly throughout the Mid- year, compared to last, according to USDA’s most recent crop production report. Those gains duction, expected to be the west and central Great Plains. will more than make up for the losses in the three other states in the top ten. Overall, US- smallest in years, should not be Illinois, the second largest corn DA expects national corn production to hit a record large 10.2 billion bushels, which would an issue for cattle producers. producing state, is enjoying a eclipse the previous record of 10.1 billion bushels in 1994. According to the October 10 good harvest, with corn yields report, released by the National expected to be 33 bushels high- INSIDE WLJ FALSE ALARM — Mexico EU BAN REMAINS — The Eu- LAND ACCESS WAR — Hunters COUNTRY OBSERVATIONS — INDEX (priority handling) closed the border on U.S. live- ropean Union announced last and Montana ranchers are in the WLJ Field Representative Jerry Beef Bits . .P-3 (priority handling) stock for a little bit, however, it was week it would pay additional tar- midst of a dispute concerning mo- York takes a look at the West Sale Reports . .P-10 simply a case of overcautious- iffs on products in order to com- tor vehicle access to 30,000 acres Coast bull sale season, and Markets . .P-12 ness as 40 Arizona cattle tested ply with a World Trade Organi- of BLM land in that state.