Cattle Outlook: Corn prices set records as drought continues

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The August Cattle on Feed report had no big surprises. USDA said placements during July were down 10% and July marketings were down 0.3%. That combination put the August 1 on-feed number 0.7% above the year-ago level.

The drought continues. USDA's Crop Progress report says only 23% of the corn crop and 31% of the soybean crop are in good or excellent condition. A year ago the numbers were 57% and 59%, respectively. Nationally, 17% of pastures are rated as being in good or excellent condition. A year ago 37% were. USDA says 0% of Missouri pastures are in good or excellent condition. This week's report says 1% of pastures in Missouri are rated as being in fair condition with 12% poor and 87% very poor.

Corn prices continue to set records. The September, December, March and May corn contracts ended the week above $8/bu.

The latest Cold Storage report says the amount of beef in cold storage at the end of July was down 3% from June, but up 10% from a year ago.

Domestic beef demand was up 2% in June compared to 12 months earlier. However, export demand was down 10% leaving fed cattle demand down 1% compared to June 2011. Thus far in 2012, beef demand is outperforming both pork demand and chicken demand.

Beef carcass cutout values edged up a tiny bit this week. On Friday morning, the choice boxed beef carcass cutout value was $193.65/cwt, up 64 cents from last Friday. The select carcass cutout was up 3 cents from the previous week to $184.81/cwt.

Fed cattle prices were mixed this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $120.34/cwt, up 39 cents from last week and up $7.39/cwt from the same week last year. Steer prices on a dressed basis averaged $187.45/cwt this week, down $1.56 from a week ago, but up $7.33/cwt from a year ago.

This week's cattle slaughter totaled 653,000 head, up 1.6% from last week, but down 3.7% from a year ago. The average steer dressed weight for the week ending August 11 was 862 pounds, unchanged from the week before and up 16 pounds from a year ago. That was the 31st consecutive week above year-earlier.

Oklahoma City feeder cattle prices were steady to $3 lower this week with prices for medium and large frame #1 steers: 400-450# $179-195, 450-500# $167.50-$178, 500-550# $151-$166.50, 550-600# $140.50-$152, 600-650# $135-$148, 650-700# $130-$143, 700-750# $130-$142.50, 750-800# $125-$139.50, 800-900# $132-$138, and 900-1000# $126-$130.25/cwt.

The August live cattle futures contract settled at $119.87/cwt, down $1.20 from the previous Friday. The October contract settled at $124.45/cwt, down 82 cents. December closed at $127.87/cwt, down 33 cents from the previous Friday.

September feeder cattle futures ended the week at $142.95/cwt, 75 cents lower than last Friday. October feeders ended the week at $144.42/cwt, up 92 cents for the week.

Source: Ron Plain and Scott Brown



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