USDA's August crop report predicts this fall the nation's corn harvest will exceed 14 billion bushels for the first time. The soybean harvest is expected to come in at 3.816 billion bushels, up 457 million bushels from 2009's record. More production means lower prices. USDA is currently forecasting the seasonal average corn price will be between $3.55 and $4.25 per bushel. They expect soybean prices to average between $9.35 and $11.35 per bushel.
USDA raised both their forecast of 2014 beef production and their forecast of annual average price. They now expect fed cattle to average in the low $150s on a live weight basis.
Domestic beef demand is increasing. Retail demand was up 1.9% in June. Over the last 12 months, domestic beef demand is up 1.6%. Export demand growth is even stronger. Beef export demand was up 7.7% in June. Over the last year, export demand for U.S. beef is up 11.5%.
Live cattle imports during the first half of 2014 were up 8.6% with 56,423 more cattle coming south from Canada and 35,650 more coming north from Mexico.
Choice boxed beef cutout values are down for the second consecutive week. The cutout value for choice carcasses this morning was $256.04/cwt, down $5.29 from last Friday, but $62.05 higher than a year ago. The select cutout declined to $250.21/cwt on today's morning report, down $3.48 for the week, but up $64.04 from a year earlier.
Fed cattle prices went down with the meat value. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $154.74/cwt, down $6.01 from last week's average, but up $30.88 compared to a year ago. The 5 area average dressed price for steers declined $9.78 for the week to $243.69/cwt.
Cattle slaughter totaled 577 thousand head this week, up 0.7% from the week before, but 7.5% fewer than the same week last year. The average dressed weight for steers slaughtered the week ending August 2 was 874 pounds, up 4 pounds from the week before and 8 pounds heavier than the same week last year.
Feeder cattle prices were down $2 to $10 at this week's Oklahoma City auction. This week's prices for medium and large frame #1 steers by weight group were: 400-450# $278-$329, 450-500# $255-$272, 500-550# $261-$274, 550-600# $243-$274, 600-650# $224-$249, 650-700# $220-$239, 700-750# $210-$226.50, 750-800# $212.50-$222.75, 800-900# $208-$222, and 900-1000# $204/cwt.
Cattle futures were mixed this week. The August live cattle futures contract closed at $150.60/cwt today, down $1.95 on the week. October fed cattle settled at $147.75/cwt, down $2.25 for the week. The December contract ended the week at $150.90/cwt.
The August feeder cattle contract gained $1.90 this week to end at $217.22/cwt. September feeders settled at $215.10/cwt today, up 38 cents from the previous Friday.