Cash fed cattle business was slow in developing this week. On Thursday, a few sales in Iowa/Minnesota came in at $81 to $81.50, about $1 lower than the bulk of last week’s sales. Significant business in most regions did not occur until Friday, with prices mostly steady at around $82. Cattle slaughter is expected to be pretty light this week: 663,000 head this week compared to 670,000 last week and 683,000 head a year ago. Year-to-date cattle slaughter is down 5.4% from last year.
Feeder cattle markets were generally lower this week, with early-week sales in particular coming under pressure following last week’s futures market sell-off. At Oklahoma City, feeder cattle were $1 to $3 lower; feeder heifers, $2 to $4 lower. Stocker steers and heifers were $2 to $5 lower. In Lexington, KY, feeder steers and heifers were weak to $2 lower. Stocker steers and heifers were steady to $3 lower. In West Plains, MO, steers over 700 pounds were $3 to $4 higher; steers from 500 to 700 pounds were $2 to $4 lower; and weights under 500 pounds were mostly steady. Heifer prices were a bit mixed, with number 1 heifers called steady. Other grades were $3 to $5 lower. In Arkansas, prices on feeder steers were mostly $2 to $6 lower. Feeder heifer prices were $3 to $6 lower. In Georgia, stocker heifers were steady to $2 lower. Other classes were called $1 to $3 lower.
At Mississippi auctions this week prices were reported as $1 to $2 lower on all classes. Price for steers (medium and large, 1-2) in Mississippi auctions throughout the week were as follows: 200-300 pounds, $120-$130; 300-350 pounds, $115-$125; 350-400 pounds $110-$115; 400-500 pounds $91-$106; 500-600 pounds $90-$100; 600-700 pounds $88-$100; 700-800 pounds, $88-$96. Slaughter cows were $2 to $6 lower this week. For the week cows brought $37-$44 for boning cows (850-1,200 lbs) and $32-$40 for lean (850-1,200 lbs).
Following a tumultuous week, last week, Live Cattle futures trading seemed kind of uneventful this week. Live Cattle started the week lower following last week’s lower cash trade. The front three contracts managed to end the week higher. Deferred contracts came under pressure from lower corn futures later in the week and thus ended the week down slightly for the week. Live Cattle futures closing prices on this Friday (with change from last week’s close in parentheses) were as follows: June $80.47 (+0.32), August $81.60 (+0.50); October $87.10 (+0.50); December $88.82 (-0.11); February $90.27 (-0.61); April $92.20 (-0.60).
Feeder futures drifted sideways to lower for most of the week before rising sharply on Friday. Lower corn futures on Friday (following a pretty volatile week in the corn market) helped support higher feeder futures after two weeks of sharp losses. Feeder Cattle futures closing prices on Friday (with change from last week’s close in parentheses) were as follows: August $97.62 (+1.00); September $97.57 (+0.64); October $98.62 (+1.05); November $98.32 (+0.67); January $98.00 (+1.85).
Corn futures had a very up-and-down week. USDA released their latest supply and demand estimates for the 2009/10 marketing year on Wednesday. USDA’s projection for this year’s yield was lowered 2.1 bu/acre, compared to last month, to 153.4 bu/acre due to delayed plantings across much of the country and primarily in key corn growing states Illinois and Indiana. The result of this is smaller production at 11.935 billion bushels. This is partially offset by a reduction in corn used for feed which is 1.9% lower than last month’s report at 5.15 billion bushels. Collectively, ending stocks are projected at 1.09 billion bushels, 55 million bushels below the previous month’s expectation and 510 million bushels lower than last year. This puts the stocks to use ratio at 8.75%. This is all generally supportive of corn prices; however, this information largely took a back seat to the influence of outside markets. A stronger dollar, particularly late in the week, undermined support for corn and pushed most contracts sharply lower on Friday. July corn closed at $4.25 ½ on Friday, down 18 ½ cents over last week. The harvest time price of the September contract closed at $4.34 ½ on Friday, down 19 ½ cents.
Wholesale beef prices moved a little higher for the first part of the week before starting back down to finish the week about where they started, at least on Choice cuts. Select cuts slid a little further, widening the Choice/Select spread. The Choice cutout worked out to $138.79 in Friday afternoon’s report, up 14 cents from a week ago. The Select cutout stood at $132.51 on Friday afternoon, down $1.08 from a week ago.