Cattle Outlook: Boxed beef prices advance, fed prices retract

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Fed cattle prices backed off a bit from last week's record highs. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $149.13/cwt, down $1.51 from a week ago, but up $21.41 from a year ago. Steer sales on a dressed basis averaged $238.29/cwt this week, down $1.69 from a week ago, but up $35.03 from year ago. Sales volume was moderate.

This morning, the boxed beef cutout value for choice carcasses was $236.88/cwt, up $12.32 from the previous Friday and up $39.16 from a year ago. The select carcass cutout is $233.27/cwt, up $11.61 from last week and up $38.17 from last year.

The Bureau of Labor Statistics says that non-farm payroll increased by 175,000 jobs in February. That is a good sign for the economy and for meat demand.

Statistics Canada reported the January 1 inventory of cattle and calves was down 0.7% from a year ago. The Canadian inventory of cows and heifers that have calved was down 0.6%. The 2013 Canadian calf crop totaled 4.4897 million head, up 0.6% from the year before. The Canadian cattle herd is roughly one-seventh the size of the U.S. herd.

This week's cattle slaughter totaled 548,000 head, down 3.9% from the previous week and down 8.4% from the corresponding week last year.

The average steer dressed weight for the week ending on February 22 was 866 pounds, up 4 pounds from the week before, but down 1 pound from a year earlier.

Year-to-date beef production is down 7.0%.

Feeder cattle prices at this week's Oklahoma City auction were not well tested in light volume due to a late winter storm. This week's prices for medium and large frame #1 steers by weight were: 450-500# $223-$232, 500-550# $231, 550-600# $200-$212, 600-650# $190-$194.50, 650-700# $174.50-$189.50, 700-750# $167-$182, 750-800# $169, 800-900# $158-$165, and 900-1000# $155.25-$160.85/cwt.

Cattle futures were mixed this week. The April live cattle futures contract closed at $143.25/cwt today, down $1.72 from last week's close. June fed cattle settled at $135.87, up $1.67 for the week. August settled at $133.85/cwt, up $1.23 from the previous Friday.

Despite a strong rally in corn prices, feeder cattle futures ended the week higher. The March feeder cattle contract ended the week at $172.37/cwt, up $1.27 for the week. April feeders closed at $173.65/cwt, up 60 cents from the previous Friday. The May feeder cattle contract gained 70 cents this week to end at $174.40.

Source: Ron Plain and Scott Brown

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