Cattle outlook for week ending June 1, 2012

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USDA says 72% of the corn crop was in good or excellent condition on May 27. That compares to 77% good or excellent the week before and 63% a year ago. The Crop Progress report says 89% of the soybean crop was planted by May 27 compared to an average of only 61% on that date. Nationally, 22% of pastures were rated poor or very poor in late May. That compares to 19% poor or very poor the week before and 21% a year ago.

This week’s news for the U.S. economy was not good. On Thursday the government lowered its estimate of first quarter growth from 2.2% to 1.9%. Today they said the unemployment rate increased to 8.2% in May from 8.1% in April. The economy added only 69,000 new jobs in May, the fewest in a year.

For the second week in a row, the choice carcass cutout value was higher and the select cutout was lower. On Friday morning, the choice boxed beef carcass cutout value was $197.35/cwt, up $2.64 from the previous Friday. The select carcass cutout was down 27 cents from the previous week to $185.82/cwt of carcass weight. The choice-select spread is now $11.52/cwt, the most since early January.

Fed cattle prices were slightly higher this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $121.90/cwt, up 63 cents from last week and up $17.02/cwt from the same week last year. Steer prices on a dressed basis averaged $194.78/cwt this week, up $1.28 from a week ago and up $24.57 from a year ago.

This week’s cattle slaughter totaled 596,000 head, down 6.3% from the week before and down 2.5% from a year ago. The average dressed weight for steers for the week ending on May 19 was 841 pounds, up 6 pounds from the week before, up 22 pounds from a year ago, and above a year earlier for the 19th week in a row. Year-to-date beef production is down 2.9%.

Because of Monday’s holiday, Oklahoma City didn’t have a feeder cattle auction this week. Missouri feeder cattle prices were mostly $1 to $8 higher this week with the ranges for medium and large frame #1 steers: 400-450# $180-$225, 450-500# $175.25-$214, 500-550# $170-$205, 550-600# $162-$195, 600-650# $152-$186.50, 650-700# $149-$173, 700-750# $148.25-$163.25, 750-800# $153.50-$162, 800-900# $141-$156, and 900-1000# $135-150.25/cwt.

Fed cattle futures ended the week slightly higher. The June live cattle contract settled at $117.70, up 5 cents from the previous Friday. The August contract gained 50 cents this week to end at $119.60. October ended the week at $123.95 and December at $127.30/cwt.

The August feeder cattle contract settled at $157.37/cwt, down $1.13 from the previous Friday. September feeder cattle lost 80 cents this week to close at $158.67. October settled at $159.75/cwt.

Posted on: 
June 2, 2012

Dr. Ronald L. Plain is D. Howard Doane Professor and is Extension Economist in the Department of Agricultural Economics at the University of Missouri-Columbia. He serves as program leader for extension within the department and has been a faculty member at MU since 1981. He can be reached by e-mail at plainr@missouri.edu His website is: http://web.missouri.edu/~plainr

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