Cattle Outlook: Cattle prices recover, beef cutout a bit lower

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Cattle prices have weathered the announcement of a fourth U.S. cow with BSE quite well. The June live cattle futures contract ended the week at $115.37/cwt, up $2.52 from last Friday. The August contract settled at $118.50/cwt, up $2.95 for the week. The October fed cattle contract ended the week at $123.80/cwt, up $3.08 compared to the week before. December fed cattle settled at $127.15/cwt.

August feeder cattle closed the week $6.05 higher than last Friday at $158.10/cwt.

USDA says 53% of corn acreage had been planted by April 29. That compares to an average of 27% planted on that date, and 12% planted on April 29, 2011. USDA is predicting that 2012 corn acreage will be the most since 1937. A big drop in cash corn prices is expected this fall. May corn futures gained 9 cents this week to end at $6.62 per bushel. December corn futures are trading $1.38 a dollar per bushel under May futures.

The beef cutout value was a bit lower this week. On Friday morning, the choice boxed beef carcass cutout value was $190.20/cwt, down 45 cents from the previous Friday. The select carcass cutout was down 93 cents from the previous week to $186.31 per hundred pounds of carcass weight.

Fed cattle prices were mixed this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $120.16/cwt, up 37 cents from last week and up $5.07/cwt from the same week last year. Steer prices on a dressed basis averaged $190.90/cwt this week, down $2.79 from a week ago, but up $6.80 from a year ago. Packer margins are improving. Last week, steer dressed prices were $3.04/cwt above the choice cutout value. This week the price spread is only 70 cents/cwt.

This week's cattle slaughter totaled 623,000 head, up 2.0% from the week before, but down 5.5% from a year ago. The average dressed weight for slaughter steers for the week ending on April 21 was 835 pounds, down 2 pounds from the week before, up 20 pounds from a year ago, and above a year earlier for the 15th consecutive week. Year-to-date beef production is up down 3.3%.

Oklahoma City feeder cattle prices were mostly $2 to $8 lower this week with the ranges for medium and large frame #1 steers: 400-450# $196-$199, 450-500# $191.50-$198.50, 500-550# $174.50-$190.50, 550-600# $166.50-$182.25, 600-650# $152-$167.50, 650-700# $149.50-$159, 700-750# $147-$153, 750-800# $143.50-$149, 800-900# $131.75-$146, and 900-1000# $126.50-$133/cwt.

Source: Ron Plain

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