Only 80 thousand jobs were added to the U.S. economy in June and the unemployment rate held steady at 8.2%. The stock market went down and the dollar got stronger. None of this is not good news for meat demand.
The weather has been miserable this summer. The Drought Monitor says 56% of the land in the contiguous 48 states is in some stage of drought. Nationally, 43% of pastures were rated poor or very poor on July 1. That compares to 34% poor or very poor the week before and 27% a year ago. USDA estimates only 48% of the corn crop was in good or excellent condition on July 1. That compares to 56% good or excellent the week before and 69% a year ago. The Crop Progress report says 45% of the soybean crop was rated good or excellent on July 1 compared to 53% a week earlier and 66% a year ago.
The hot, dry weather is pushing feed prices higher fast. The July corn futures contract ended the week at $7.43/bu, up 71 cents from the week before and up $1.46 from two weeks earlier. July soybean meal ended the week at $471.60/ton, up $35.60 from the previous Friday. Alfalfa hay averaged $201 per ton in June.
The beef carcass cutout value was lower again this week. On Friday morning, the choice boxed beef carcass cutout value was $193.80/cwt, down 89 cents from the previous Friday. The select carcass cutout was down $3.40 from the previous week to $175.06/cwt of carcass weight. The choice-select spread, $18.74/cwt, is the widest since December 12.
Fed cattle prices were a bit higher this week on very light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $117.05/cwt, up 56 cents from last week and up $2.53/cwt from the same week last year. Steer prices on a dressed basis averaged $187.67/cwt this week, up $3.52 from a week ago and up $5.21 from a year ago.
Because of the July 4 holiday, this week’s cattle slaughter totaled only 571,000 head, down 12.6% from the week before and down 2.4% from a year ago. The average steer dressed weight for the week ending on June 23 was 853 pounds, up 1 pound from the week before, up 20 pounds from a year ago, and above a year earlier for the 24th week in a row.
Oklahoma City had light volume of feeder cattle this week with prices for medium and large frame #1 steers of: 550-600# $159.50-$161.50, 600-650# $154-$162, 650-700# $150-$158, 700-750# $146-$154, 750-800# $150.50, 800-900# $146-$148, and 900-1000# $132-135/cwt.
The August live cattle contract settled at $119.20, down $1.25 from the previous Friday. The October contract settled at $123.65/cwt, down 75 cents. December ended the week at $127.85 and February at $130.80/cwt.
August feeder cattle futures ended the week at $146.52/cwt, $4.93 lower than last Friday. October settled at $152.60/cwt.
Source: Ron Plain and Scott Brown