Supermarkets are also close to booking fresh beef for the May 25 to May 27 U.S. Memorial Day holiday backyard cookouts.

U.S. Department of Agriculture data on Tuesday morning showed the wholesale price of choice beef, or cutout, up 21 cents to $210.46 per hundredweight (cwt), besting the previous record of $210.25 set late on Monday (all figures US$).

“Beef demand has not given up and finally futures are taking notice,” said Oak Investment Group president Joe Ocrant.

CME live cattle futures’ upswing lifted June and August above their respective 10-day moving averages of 120.31 and 120.02 cents, triggering speculative and fund buying.

June cattle closed at 121.1 cents, up 0.975 cent per pound and August ended 1.225 cents higher at 120.375 cents.

Futures’ rise stirred expectations for cash cattle to trade steady with last week’s $124 to $126.50/cwt. So far there were no cash bids or asking prices reported, said feedlot sources.

Beef cutout’s record-setting pace and expanding packer operating margins could underpin cash prices this week.

HedgersEdge.com calculated U.S. beef packer margins on Tuesday at a positive $83.25 per head, compared to a positive $73.20 on Monday and a positive $40.85 a week ago.

However, packing plants will be closed on Monday for the three-day U.S. Memorial Day holiday weekend, reducing their need for cattle.

CME feeder cattle spot-May closed 0.625 cent/lb. lower at 131.9 cents. It was guided by ideas about where the contract will settle after it expires on May 23.

Lower prices for cash feeder cattle in the most-watched Oklahoma City market pressured spot-month futures.

Other more actively-traded feeder cattle contracts followed CME live cattle higher.

August settled at 146.475 cents, two cents higher and September finished 2.075 cents higher at 148.9 cents.

Hogs gain with cattle

CME hogs drew support from the higher live cattle market, said traders and analysts.

Hog futures at times follow the live cattle market because beef is a competing meat, a trader said.

And grocery shoppers may switch from high-priced beef compared to relatively inexpensive pork even though wholesale pork prices rose on Tuesday, he said.

USDA’s Tuesday morning mandatory wholesale pork price or cutout calculated on a plant-delivered basis, was $93.48/cwt, up 68 cents from Monday.

June hogs closed up 0.325 cent/lb. to 92.4 and July ended at 91.75 cents, or 0.225 cent higher.

Nonetheless, traders sold into rallies in anticipation of cash hog and wholesale pork prices peaking soon as hog numbers begin to increase seasonally.

The average hog price on Tuesday in the western Midwest market was down 76 cents/cwt from Monday to $88.89, according to USDA data.

Packing plants will be closed for Monday’s holiday, limiting their need for supplies. And unprofitable margins will prompt some packers to curb Saturday’s slaughter.

U.S. pork packer margins on Tuesday were estimated at a negative $2.55 per head, compared to a negative 95 cents on Monday and a negative $5.55 a week ago, according to HedgersEdge.com.

Investors continue to monitor developments after U.S. government and industry veterinary officials recently detected cases of porcine epidemic diarrhea virus (PEDV) in Iowa and Indiana hog herds.

PEDV does not pose a human health or food safety risk and pork is safe to eat, a USDA spokesman said.

– Theopolis Waters reports for Reuters from Chicago.

A surge in corn planting progress during the past week eased farmer concerns about needing to hold onto supplies held in storage bins since last fall’s harvest. That relieved some pressure that supported old-crop contracts this past month.

“As the farmers get the crop planted, they are more interested in moving some old-crop inventory,” said Chad Henderson, grain market advisor with Prime Agricultural Consultants. “You probably had a pick-up in farmer sales, especially as guys got chased out of the field.”

Wheat futures also fell, hitting a fresh seven-week low on pressure from the drop in corn prices. Soybeans were mixed, with the front-month July contract edging to a three-month high while deferred months weakened.

Investors have been building up bull spreads — buying old-crop contracts and selling deferred months — in corn as supplies ran thin at processors and elevators around the U.S. Midwest. A weakening corn basis in some places provided a reason for some unwinding of those positions even as demand in the ethanol market remained firm.

“Bull spreaders have been working pretty aggressively and I think there are some that are starting to pull the trigger on coming out of a few of those,” said Jason Britt, president of Central States Commodities in Kansas City. “You get a little profit taking.”

Chicago Board of Trade July corn futures settled down 9-1/2 cents at $6.40 a bushel (all figures US$). Prices bottomed out at $6.32-1/2, the lowest level for the front-month contract since April 8.

The new-crop December contract was unchanged at $5.20-1/4 a bushel. Prices had fallen to $5.12 during overnight trading hours.

“Unbelievable”

U.S. growers took advantage of mostly clear skies last week to plant corn at a blistering pace, pushing progress to 71 per cent from 28 per cent a week earlier, the U.S. Department of Agriculture said in a weekly report on Monday afternoon.

The sowing progress topped exceeded analyst estimates in a Reuters survey that went from 59 to 70 per cent.

The increase of 43 percentage points indicates that farmers in the world’s biggest corn producer seeded a single-week U.S. record of 41.8 million acres.

“It is unbelievable how quickly they can plant corn in the U.S. which is putting pressure on prices,” said Stefan Meyer, a manager for cash markets at brokerage INTL FCStone in Sydney.

Despite the big week, farmers were still behind schedule, which kept a floor under new-crop prices. The five-year average for this time of May is 79 per cent planted and some rain this week could cause delays to the final push of seeding.

CBOT July wheat ended down 4-3/4 cents at $6.80-1/2 a bushel, hitting its lowest since April 3 during the session. Soybeans were mixed, with the old-crop July contract up 13-3/4 cents at $14.78-1/4 a bushel while new-crop November dropped 4-1/4 cents to $12.20-3/4 a bushel.

Britt said there was talk that an investment fund was unwinding its contrarian bear spread position, which kept the front-month supported even as new-crop contracts weakened.

– Mark Weinraub is a Reuters correspondent covering the Chicago grain markets.

Other recent questions and answers posted on the CropChatter site include whether producers still need to be concerned about a spring frost; what the plant stand should now be in a winter wheat field; and what the yield potential is for grain corn, based on planting date.

CropChatter is a forum where farmers and public and private agronomists can share the latest information on crop management in Manitoba. Producers are invited to submit questions to the site.

Total seeding progress across Manitoba, Saskatchewan and Alberta was estimated at 45 to 50 per cent done, according to Bruce Burnett, a weather and crops specialist with CWB (formerly the Canadian Wheat Board) in Winnipeg.

That estimate is up from only 15 per cent complete the previous week.

“It’s not quite normal, but it’s getting close to normal,” said Burnett, adding that not many producers would have thought they’d be this far along by this point a month ago, given the lateness of the spring thaw.

Northern parts of Saskatchewan were farthest behind, while southern Manitoba saw rain over the May long weekend which will cause some delays, said Burnett.

Forecasts are calling for rain in southern Alberta later in the week, with progress going forward dependent on how widespread that moisture is.

“We’re behind normal in those (wetter) areas, but not by that much,” said Burnett. It’s still only the middle of May, and he said it was too early to be thinking of shifting acreage intentions or writing any fields off.

“We’ll have to wait and see how the weather evolves over the next week,” Burnett added.

– Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

Belleville, Ont.-based Bioniche Life Sciences said last week it has hired a U.S. investment banking advisory firm, Evercore Partners, to help the company’s board and management in the “divestment” of its animal heath business.

The decision to shed the animal health business follows “several months of discussion between the board of directors and management related to unlocking corporate value for the benefit of all shareholders, and following the receipt of several unsolicited offers to purchase the business,” the company said.

Those suitors weren’t named in the release, but board chairman James Rae said “three large animal health companies have now expressed interest, in writing, in executing a purchase of the company’s animal health business.”

Bioniche said its animal health business has built up since 1979 “to the point where it is profitable before research and development” and is officially the biggest Canadian-owned animal health company, with product lines in livestock reproduction, immunotherapeutics, equine performance and companion animal health.

Bioniche Animal Health’s lead product remains Folltropin-V, a follicle stimulating hormone (FSH) used in the embryo transfer industry to induce superovulation in cattle and sheep.

Meanwhile, Bioniche One Health — the division which handles the company’s Econiche O157:H7 cattle vaccine and Animal Health and Food Safety Vaccine Manufacturing Centre in Belleville — has had “preliminary discussions” about potential partnerships concerning Econiche and manufacturing capacity in the Vaccine Manufacturing Centre,the company said.

Bioniche Therapeutics, the company’s human health division, is also “actively engaged in discussions with potential partners” involving the company’s Phase III bladder cancer product, Urocidin.

The slow-moving weather system brought heavy rains to already-saturated ground. Over the past three days these areas received 50 to 75 mm and are forecast to receive that much again over the next several days.

During the first two weeks of May the outlook had improved somewhat, with planting of all crops beginning across the north. Seeding progress last week was substantial for all of the Northern Plains. With the recent rain, planting will be stopped until drier, warmer weather returns.

The forecast is for wet weather to continue over most of the northern Plains for the next seven days, with only occasional breaks.

The rains aren’t all bad news. A significant portion of the northern Plains only received 25 to 50 per cent of normal precipitation over the previous month. For producers who succeeded in planting, the rains will recharge dwindling soil moisture levels.

Over the week, North Dakota’s planted acres surged ahead. For corn, 61 per cent is now sown compared to 18 per cent the week earlier. Corn planting is now caught up to normal for this time of year. Spring wheat is now 50 per cent sown, up 24 points from the previous week, but 17 points behind normal. The situation is similar for other crops in North Dakota. Massive seeding progress over the week, but still slower than normal. Seeding delays in North Dakota range from 15 to 30 percentage points depending on the crop.

The likelihood of elevated prevented-planting insurance claims is rising. Depending on the portion of North Dakota, May 25 or May 31 is the last date for insured planting of corn. Small grains such as barley, oats and spring wheat are only a few days later, on either May 31 or June 5.

Earlier forecasts from the U.S. Department of Agriculture had anticipated North Dakotans increasing their corn acreage from 3.6 million acres to 4.1, an increase of 114 percentage points from the previous year. Using those acreage assumptions and planting progress as of May 19 it would mean that North Dakotan farmers still had 1.7 million acres of corn to be planted. Acres may no longer be sown to corn in many areas even though it was pencilling out to be the most profitable crop. Farmers could still sow corn, but later seeding increases the risk of summer heat impacting pollination or possible risk from autumn frosts.

Soybeans, sunflowers and a few other crops can still be sown until the middle of June and may claim some of the land initially planned for corn.

– Stuart McMillan writes from Winnipeg on weather and agronomic issues affecting Prairie farmers.

Favourable weather allowed seeding to progress quite rapidly in most regions of the Prairies, which resulted in lower auction market volumes. Most backgrounding operations have liquidated fall-placed calves by this time of year and feedlot operations are content with current inventories heading into summer.

Feedgrain price uncertainty and sluggish deferred live cattle futures have many finishing operations uncertain about the margin structure during the summer months. Alberta packers bought fed cattle in the range of $119 to $121 and feeding margins appear to be holding above break-even. The feeder market appears stable and we need to see further upside in fed cattle prices or weaker feedgrain values in order to justify further upside for replacement cattle. Risk tolerance for finishing operators is quite low after a dreadful winter of equity erosion, so there is little incentive to bid the market higher from current levels at this time.

A small group of black Angus-based medium-frame steers averaging 750 pounds sold for $135 south of Calgary. Lighter cattle appeared to be under pressure this week, with smaller groups coming on the market. The market for cattle under 700 lbs. appeared to be ill defined, with a wide range of prices. Cattle over 800 lbs. were also quite variable, especially in the non-major feeding regions of Western Canada. Orders were not coming forward, which caused a fair amount of volatility, with limited demand noted on cattle over 850 lbs.

The U.S. Department of Agriculture’s report Friday showed April placements at 115 per cent of last year, which was above pre-report estimates. Feeders moved off small grain pasture in April and many analysts are scratching their heads wondering where all these cattle are coming from. We may see larger-than-expected third-quarter beef production given current on-feed inventories.

Wholesale choice beef prices reached an all-time high of $209 per hundredweight last week. A strong wholesale market, along with the softer Canadian dollar, should continue to support Canadian fed and feeder cattle prices into June. The U.S. hard red winter wheat harvest will occur about three weeks behind normal and this will be the first falling brick in the feedgrain price structure.

– Jerry Klassen is a commodity market analyst in Winnipeg and maintains an interest in the family feedlot in southern Alberta. He writes an in-depth biweekly commentary, Canadian Feedlot and Cattle Market Analysis, for feedlot operators in Canada. He can be reached by email at gklassen7@hotmail.com for questions or comments.

Regina-based Viterra said last week it will expand the rail car capacity at four elevators — its Humboldt, Ituna and Waldron facilities plus its White Star elevator near Prince Albert.

The company said it will also triple storage capacity at the White Star elevator and double the storage at Humboldt.

Canadian National Railway, which serves three of the four sites, rates the Humboldt and White Star sites with spots for 50-plus rail cars, while the Waldron and Ituna facilities can each handle over 25.

Viterra didn’t say by how much the rail car spots will increase, only that the expansions will “ensure a more efficient service provider for the farming communities in those areas.”

Storage capacity at Humboldt, according to the Canadian Grain Commission, now sits at about 16,500 tonnes, while the White Star elevator — served by the Carlton Trail Railway shortline, running from P.A. to Saskatoon — can hold up to 9,500 tonnes of grain.

The Waldron and Ituna facilities, about 30 km southeast and 55 km northwest of Melville respectively, are also relatively small for Viterra, with CGC-rated capacity of 9,500 tonnes each.

“By improving our rail and storage capacities in targeted areas, we are creating further value for our farm customers at the local level, as well as our suppliers and end use customers across North America and beyond,” Kyle Jeworski, Viterra’s CEO for North America, said in a release May 15.

Jeworski, who Glencore named in January as its chief for Viterra’s North American business, didn’t give a timeline in the release for the expansions to be completed.

The U.S. Department of Agriculture reported April placements at 1.75 million head, up 15 per cent from 1.521 million in April 2012. Analysts, on average, estimated a 13.1 per cent increase.

“The price for corn was much lower in April than in March so it made it more attractive to place cattle,” said University of Missouri livestock economist Ron Plain.

Chicago Board of Trade corn futures last month averaged $6.70-3/8 per bushel, down from $7.14-3/4 in March (all figures US$). In August 2012 corn set a record high of $8.43-3/4.

In addition, improved weather last month allowed ranchers to move cattle into feedlots, analysts said. Also, April 2013 placements compare with a much smaller placements in April 2012, they said.

Livestock Marketing Information Center director Jim Robb attributed some of the increase in April placements to last year’s drought, which tightened hay stocks and forced more cattle into feeding pens.

“Still, overall cattle numbers will remain tight which does not change the outlook for higher beef prices ahead,” said U.S. Commodities analyst Don Roose.

Separate USDA data showed the average U.S. retail beef price in April was $5.26 per lb, down from the March all-time high of $5.30/lb. but up from $4.99 a year earlier.

USDA put the feedlot cattle supply as of May 1 at 10.735 million head, or 97 per cent of a year earlier. Analysts polled by Reuters, on average, expected 96.1 per cent. It was the smallest supply for that date since 10.428 million in 2010.

The number of cattle sold to beef packers, or marketings, in April was up two per cent from a year earlier at 1.855 million head versus the forecast for a 2.8 per cent increase. That was the biggest April marketing figure since 1.857 million in 2010.

The increase was due in part to one more weekday to slaughter cattle this year than in April 2012. Also, fewer cattle were available than a year earlier, analysts said.

Analysts said that while the placements were negative, the recent pullback in Chicago Mercantile Exchange cattle futures prior to the data’s release may have factored in the report’s bearish implications.

“I think cattle futures are way too low. I don’t see any reason for them to be as low as they are and I don’t think this (report) will push them any lower on Monday,” said Plain.

U.S. Commodities analyst Roose predicted CME live cattle could start Monday’s session 0.2 to 0.3 cent/lb. higher.

– Theopolis Waters reports for Reuters from Chicago. Additional reporting for Reuters by Michael Hirtzer.

PEDV, an incurable condition that causes diarrhea, vomiting and dehydration in hogs, has been identified in Iowa, the largest producing state, and possibly beyond. The severity of the outbreak is not yet known.

The virus exists in much of the world but has not previously occurred in the western hemisphere.

The USDA’s National Veterinary Services Laboratories has detected the virus in the Iowa hog population, a Department of Agriculture spokesman said.

Cindy Cunningham, spokeswoman for the National Pork Board in Des Moines, Iowa, said: “It may be a little bit more widespread than just with Iowa at this point… we’re still trying to understand that and determine where it all is.”

Hog futures in Chicago fell sharply on Friday as rumours swirled the disease had been detected in Iowa and Minnesota.

PEDV is not a food safety concern and does not affect humans, the USDA spokesman said.

Officials with USDA’s Animal and Plant Health Inspection Service (APHIS) held a call with livestock industry representatives on Friday to discuss the situation. There are currently no interstate trade restrictions related to PEDV for U.S. hogs and pigs.

PEDV has been seen in England, much of Europe, China, Taiwan and South Korea, according to Iowa State University.

“We don’t know the orientation of this particular disease (PEDV) and how it first got here to the United States,” Cunningham said.

Tom Burger, executive director of the American Association of Swine Veterinarians, said his group was getting “conflicting reports” on how the virus might have arrived.

There is no effective treatment for the virus other than good care and the provision of adequate water to combat dehydration, according to the university. Sanitary and quarantine measures can help to slow the spread of the virus.

“All ages of the swine can be affected. But the most severe clinical signs are seen in the very young and nursing baby pigs, the baby pigs that are still nursing,” said Burger.

The current outbreak could be short lived. Pig herds typically develop a strong immunity to the virus over two to three weeks, at which point the virus disappears spontaneously.

Depending on how widespread the incidence, the virus could tighten U.S. pork supplies in about five to six months by causing the deaths of baby pigs, said Steve Meyer, president of the consulting firm Paragon Economics.

But Meyer said exports of U.S. pork would probably not be affected.

U.S. pork producers have been fighting back from record-high feed costs that followed the historic 2012 drought, which hurt their operating margins. Grain prices are headed down, giving incentives to producers to expand their herds.

– Ros Krasny is Reuters’ editor for commodities news in Washington, D.C. Additional reporting for Reuters by Theopolis Waters, Tom Polansek and P. J. Huffstutter in Chicago.