Cattle Outlook: Choice beef cutout down 8th consecutive week

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The July cattle on feed report said June placements were down 4.6% and marketings were down 3.6%. The total on feed at the start of July was down 3.2%. The pre-release trade estimates were for June placements to be down 5.1% and June marketings down 5.3%. There was one fewer slaughter day this June than last.

Domestic beef demand in May was up 0.7% compared to a year ago. After three consecutive down months, export demand for U.S. beef was up a solid 6.2% in May. Consumer meat demand was 0.9% stronger this May than last.

Retail prices for choice beef in June averaged $5.294 per pound. That was up 5.3 cents from the average in May, up 36.2 cents from a year ago, and less than a penny under the $5.30/pound record set in March. All fresh beef averaged $4.90 per pound in June.

Crop growing conditions are much better than a year ago. As of July 15, 66% of corn acres were rated in good or excellent condition. That is down 2 percentage points from the week before, but up 35 points from a year ago. 28% of U.S. pastures were rated in poor or very poor condition on July 15, down from 54% poor or very poor a year ago.

Fed cattle prices were a bit lower this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $120.71/cwt, down 53 cents from last week, but up $7.81 from the same week last year. Steer prices on a dressed basis averaged $191.00/cwt this week, down 73 cents from a week ago, but up $12.11 from a year ago.

This morning, the boxed beef cutout value for choice carcasses was $189.51/cwt, down $2.35 from the previous Friday, but up $9.37 from a year ago. This was the eighth consecutive week with lower choice cutout. The select carcass cutout is at $184.32/cwt, up 30 cents for the week. The choice-select price spread dropped $2.65 this week to $5.19/cwt.

This week's cattle slaughter totaled 651,000 head, up 1.7% from last week, but down 0.3% from a year ago. The average steer dressed weight for the week ending on July 6 was 860 pounds, up 5 pounds from the week before and up 1 pound from a year ago.

Oklahoma City feeder cattle auction prices this week were $2 lower to $4 higher with prices for medium and large frame #1 steers: 450-500# $172-$184.50, 500-550# $163-$186, 550-600# $156-$174.75, 600-650# $145-$164.25, 650-700# $137-$156, 700-750# $142.75-$151.75, 750-800# $137.75-$150, 800-900# $132.85-$148.50, and 900-1000# $127.50-$138/cwt.

The August live cattle futures contract closed at $121.97/cwt today, up 12 cents from last week's close. The October fed cattle contract gained 15 cents from last Friday to settle at $126.22/cwt. December ended the week at $128.72/cwt. August feeder cattle futures settled at $152.25/cwt, up $2.13 for the week. The September contract gained $2.53 from last Friday to close at $155.25/cwt. October settled at $157.20/cwt.

Source: Ron Plain and Scott Brown

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