Cattle Outlook: Cattle, beef prices lower while corn futures soar

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Corn and soybean prices set new records this week. The September corn futures contract ended the week at $8.245/bu, up 84 cents from the week before and up $3.15 from five weeks earlier. December corn ended the week at $7.9575/bu. August soybean meal ended the week at $543/ton.

USDA estimates 31% of the corn crop was in good or excellent condition on July 15. That compares to 40% good or excellent the week before and 66% a year ago. The Crop Progress report says 34% of the soybean crop was rated good or excellent on July 15 compared to 40% a week earlier and 64% a year ago.

Nationally, 54% of pastures were rated poor or very poor on July 15. That compares to 50% poor or very poor the week before and 32% a year ago. For Missouri, the number is 92% poor or very poor. Only 1% of Missouri pastures are rated in good or excellent condition.

Retail beef prices declined for the third consecutive month during June. The average price of beef in grocery stores during June was $4.932 per pound, down 3.3 cents from May, but up 12.3 cents from June 2011.

The 5-area slaughter steer price for June averaged $119.30/cwt, down $1.80 from May but up $12.10 from June 2011.

The beef carcass cutout value is lower for the fifth consecutive week. On Friday morning, the choice boxed beef carcass cutout value was $180.14/cwt, down $3.42 from the previous Friday. The select carcass cutout was down $2.56 from the previous week to $170.73/cwt of carcass weight. This week the choice-select spread dropped from $10.27/cwt to $9.40/cwt.

Fed cattle prices were also lower this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $112.90/cwt, down $1.78 from last week, but up $4.40/cwt from the same week last year. Steer prices on a dressed basis averaged $178.89/cwt this week, down $3.27 from a week ago, but up $4.58 from a year ago.

This week's cattle slaughter totaled 654,000 head, up 2.0% from last week, and unchanged from a year ago. The average steer dressed weight for the week ending on July 7 was 859 pounds, up 3 pounds from the week before, up 14 pounds from a year ago, and above a year earlier for the 26th week in a row.

Oklahoma City feeder cattle prices were $6 to $10 lower this week with prices for medium and large frame #1 steers: 500-550# $136-$152, 550-600# $132.50-$145, 600-650# $126-$147.50, 650-700# $124.75-$143, 700-750# $120-$139.75, 750-800# $124-$137.25, 800-900# $122-$136, and 900-1000# $121-128.50/cwt.

Dry pastures and record corn prices are causing feeder cattle prices to plunge. The price of 600-650 pound feeder steers has dropped $30/cwt in four weeks.

The August live cattle contract settled at $117.95/cwt, up 75 cents from the previous Friday. The October contract settled at $123.10/cwt, up $1.65. December closed at $126.30/cwt.

August feeder cattle futures ended the week at $136.10/cwt, $2.90 lower than last Friday.

Source: Ron Plain and Scott Brown



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