Cattle Outlook: Record corn harvest expected but planting lags

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Corn planting is falling farther behind normal. As of May 5, 12% of corn acres were planted compared to 69% a year ago and a 5-year average of 47% planted by May 5.

USDA released their forecast of 2013 crop production and prices today. They are forecasting a record 14.14 billion bushel corn harvest with an average farm price of $4.70/bushel.

Beef exports were down 3.1% in March and imports were down 3.0% compared to a year earlier. Exports to Japan were up 70% in March, but beef shipments to Mexico and South Korea were down and shipments to Russia were zero due to a dispute over ractopamine use. First quarter beef exports were down a slight 0.2% while imports were up 1.4%. March beef exports equaled 9.25% of U.S. production. Beef imports equaled 10.62% of production.

During March, the U.S. imported 115,288 cattle from Canada and 110,624 cattle from Mexico. Cattle imports were 15.9% fewer than a year ago.

Retail demand for choice beef was up slightly in March, but export demand for U.S. beef was down. These opposing forces combined to produce a slightly lower demand for slaughter cattle. Packer demand for fed cattle has been on a slow decline for 14 months.

The choice beef cutout value reached $200/cwt for the first time ever last week and continued to climb. This morning, the choice boxed beef carcass cutout value was a record $205.55/cwt, up $4.70 from the previous Friday and up $16.62 from a year ago. The select carcass cutout is at $191.11/cwt, up 84 cents for the week. The choice-select price spread is more than $14/cwt, the most since December.

Fed cattle prices were lower this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $126.22/cwt, down $2.80 from last week, but up $5.34/cwt from the same week last year. Steer prices on a dressed basis averaged $202.74/cwt this week, down $3.81 from a week ago, but up $10.61 from a year ago.

This week's cattle slaughter totaled 631,000 head, up 1.1% from last week, but down 1.6% from a year ago. The average steer dressed weight for the week ending on April 27 was 840 pounds, down 4 pounds from the week before, but up 12 pounds from a year ago. This was the 68th consecutive week with average steer weight above the year-earlier level.

Oklahoma City feeder cattle prices were $2 to $4 lower this week with prices for medium and large frame #1 steers: 450-500# $164, 500-550# $149-$169, 550-600# $136-$152.50, 600-650# $131-$152.75, 650-700# $128-$147, 700-750# $131.75-$143.50, 750-800# $128-$137, 800-900# $119.50-$129, and 900-1000# $114.75-$123/cwt.

The June live cattle futures contract closed at $120.45/cwt today, down $1.37 from last week's close. The August fed cattle contract lost $1.20 from last Friday to settle at $120.77/cwt. October fed cattle settled at $123.92/cwt.

Source: Ron Plain and Scott Brown

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