The U.S. unemployment rate rose for the third consecutive month reaching 9.2% in June. Non-farm payroll increased by only 18,000 during the month. This is obviously not good news for the economy or for meat demand.

It looks increasingly likely that the 45 cent per gallon ethanol blenders' tax credit will end before the current scheduled date of December 31; perhaps as early as July 31. The impact on corn prices should be modest if gasoline prices remain high.

The 5-area daily weighted average price for slaughter steers sold through Thursday of this week on a live weight basis was $114.52/cwt, up $4.20 from last week. Steers sold on a dressed weight basis this week averaged $182.46/cwt, $5.39 higher than the week before. This week last year, live steer prices averaged $91.83/cwt and carcass prices averaged $148.24/cwt.

Friday morning the choice boxed beef carcass cutout value was $179.19/cwt, up 84 cents from last week. The select carcass cutout was up $1.58 from the previous Friday to $174.06 per hundred pounds of carcass weight.

Because the week started with July 4, cattle slaughter totaled only 582,000 head this week, down 12.7% from the week before and down 3% compared to the same week last year. The average steer dressed weight for the week ending June 25 was 833 pounds, up 1 pound from the week before and 9 pounds heavier than for the same week in 2010. Steer weights have been above year-ago levels for 29 consecutive weeks. Year-to-date beef production is up 0.5%.

Because of Monday's Independence Day holiday, there was no feeder cattle market at Oklahoma City this week, nor at a lot of other auctions across the country. Missouri auction market prices this week were steady to $10 higher on light sales. Price ranges for medium and large frame #1 steers: 400-450# $142-$176.50, 450-500# $156.50-$172, 500-550# $145-$168, 550-600# $139-$166.50, 600-650# $132-$160.75, 650-700# $134-$155.50, 700-750# $136.50-$151, 750-800# $132-$148.75, 800-900# $127.75-$142 and 900-1000# $130.25-$138/cwt.

The August fed cattle futures contract ended the week at $114.65/cwt, up $1.80 from last week's close. October ended the week at $20.20/cwt, up 53 cents. The December contract closed at $124.55. February settled at $125.90/cwt.

The August feeder cattle contract gained $3.13 this week to close at $143.60/cwt.

USDA estimates 69% of U.S. corn was in good to excellent condition at the start of the week, 1 percentage point better than the week before and 2 points worse than a year ago. For the week, the July corn contract gained 32 cents and closed at $6.72 per bushel on Friday. December corn ended the week at $6.37 per bushel.

Source: Ron Plain, University of Missouri