July 13, 2012 cattle outlook

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by Ron Plain and Scott Brown

Nationally, 50% of pastures were rated poor or very poor on July 8. That compares to 43% poor or very poor the week before and 29% a year ago. For Missouri, the number is 87% poor or very poor. Only 1% of Missouri pastures are rated in good or excellent condition. USDA estimates 40% of the corn crop was in good or excellent condition on July 8. That compares to 48% good or excellent the week before and 69% a year ago. The Crop Progress report says 40% of the soybean crop was rated good or excellent on July 8 compared to 45% a week earlier and 66% a year ago.

USDA's July crop report lowered predicted corn yield to 146 bushels per acre and raised the predicted marketing year price to $5.90/bu. The July corn futures contract ended the week at $7.5575/bu, up 13 cents from the week before and up $1.76 from four weeks ago. December corn ended the week at $7.405/bu.

USDA's latest trade data is not encouraging. Beef exports during May were down 11.6% from a year earlier and beef imports were up 22.4%. During May exports equaled 9.3% of U.S. production and imports equaled 10.8% of production. For the first 5 months of 2012, beef exports were down 10.8% and imports are up 22.4%. January-May exports were down 117 million pounds with South Korea accounting for 43% of the decline. January-May imports are up 190 million pounds with Australia accounting for 71% of the increase.

The beef carcass cutout value is lower for the fourth consecutive week. On Friday morning, the choice boxed beef carcass cutout value was $183.56/cwt, down $10.24 from the previous Friday. The select carcass cutout was down $1.77 from the previous week to $173.29/cwt of carcass weight. This week the choice-select spread dropped from $18.74/cwt to $10.27/cwt.

Fed cattle prices were also lower this week on good volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $114.69/cwt, down $2.36 from last week, but up $3.82/cwt from the same week last year. Steer prices on a dressed basis averaged $182.16/cwt this week, down $5.51 from a week ago, but up $3.14 from a year ago.

This week's cattle slaughter totaled 641,000 head, up 11.7% from Independence Day week, but down 4.6% from a year ago. The average steer dressed weight for the week ending on June 30 was 856 pounds, up 3 pounds from the week before, up 18 pounds from a year ago, and above a year earlier for the 25th week in a row.

Oklahoma City feeder cattle prices were $2 to $10 lower this week with prices for medium and large frame #1 steers: 450-500# $154.50-$164, 500-550# $148-$159, 550-600# $140-$160, 600-650# $138-$154, 650-700# $131.50-$152.10, 700-750# $132.25-$148.50, 750-800# $136.50-$145.75, 800-900# $135-$143.35, and 900-1000# $124.50-136.25/cwt.

The August live cattle contract settled at $117.20/cwt, down $2.00 from the previous Friday. The October contract settled at $121.45/cwt, down $2.20. December closed at $124.90. August feeder cattle futures ended the week at $139.00/cwt, $7.52 lower than last Friday.

Posted on: 
July 13, 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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