Cattle Outlook: Choice boxed beef tops $200

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Finally, above $200! On Thursday, the choice boxed beef cutout value reached $200/cwt for the first time. Choice boxed beef approached $200/cwt in February, June and October of last year and March of this year only to fall back. On Friday morning, the choice boxed beef carcass cutout value was $200.85/cwt, up $9.04 from the previous Friday and up $10.65 from a year ago. This morning the select carcass cutout was at $190.27/cwt, up $5.81 for the week. The choice-select price spread is $10.58/cwt, the most since January 11.

Fed cattle prices were higher this week on heavy volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $129.02/cwt, up $1.77 from last week and up $8.86/cwt from the same week last year. Steer prices on a dressed basis averaged $206.56/cwt this week, up $3.96 from a week ago and up $15.66 from a year ago.

The latest job numbers sparked a big jump in the stock market today. The Bureau of Labor Statistics says the economy added 165,000 jobs during April and the unemployment rate fell from 7.6% in March to 7.5% in April. More people working is good news for meat demand. On the worrisome side, the average workweek slipped from 34.6 hours to 34.4 hours and the underemployment rate, which includes people who have part time jobs but want full time jobs, increased from 13.8% to 13.9%. Could this all reflect employers creating more part time jobs by eliminating full time jobs in order to avoid the new Obamacare rules?

This week's cattle slaughter totaled 624,000 head, down 0.2% from last week and down 0.5% from a year ago. The average steer dressed weight for the week ending on April 20 was 844 pounds, down 7 pounds from the week before, but up 9 pounds from a year ago. This was the 67th consecutive week with average steer weight above the year-earlier level.

Oklahoma City feeder cattle prices were steady to $2 higher this week with prices for medium and large frame #1 steers: 400-450# $176-$188.50, 450-500# $164-$170, 500-550# $163.75-$168.50, 550-600# $153-$168.50, 600-650# $141-$164.50, 650-700# $132-$138, 700-750# $134.50-$137.50, 750-800# $131-$137.50, 800-900# $123-$133.50, and 900-1000# $117-$124/cwt.

The June live cattle futures contract closed at $121.82/cwt today, down 78 cents from last week's close. The August fed cattle contract lost $1.30 from last Friday to settle at $121.97/cwt. October fed cattle settled at $125.30/cwt, down $1.15 from the week before.

Corn futures moved higher this week putting pressure on feeder cattle futures. May feeder cattle futures ended the week at $138.77/cwt, $3.03 lower than last week's close. August feeder cattle settled at $147.50/cwt, down $3.67 for the week. The October feeder cattle contracted ended the week at $151.25/cwt.

Source: Ron Plain and Scott Brown



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