Cattle Outlook: Fed cattle, boxed beef prices higher

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The September cattle on feed report said placements into large feedlots during August were 10% lower than for any August since USDA began the current data series in 1996. August marketings were down 3.7% due to one fewer slaughter day. Steer and heifer slaughter during August was down 5.4% compared to 12 months earlier. The number of cattle on feed at the start of September was down 7.2% from a year ago and the lowest for any September since 2003.

A fire on Thursday has closed the Creekstone slaughter plant in Arkansas City, Kansas for an indefinite period.

The crop condition report for September 22 said 55% of corn acres were in good or excellent condition. That was up 2 percentage points from the month before and up 31 points from a year ago. The pasture condition report rated 36% of U.S. pasture acres as poor or very poor. That was 1 percentage point less than the week before and 20 points less than a year ago.

USDA’s September Cold Storage report said stocks of frozen beef on August 31 were down 6.2% from a month earlier, but up 0.2% from a year ago. Beef stocks are the lowest of any month since November 2012.

Fed cattle prices were higher this week with very light sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $124.31/cwt, up $1.61 from last week and up $1.85 from the same week last year. Steers sold on a dressed basis averaged $195.24/cwt this week. That is $4.25 higher than a year ago.

This morning, the boxed beef cutout value for choice carcasses was $192.85/cwt, up 40 cents from the previous Friday and up $3.55 from a year ago. The select carcass cutout is at $176.91/cwt, up 80 cents for the week, but down $1.34 from the same day last year.

This week's cattle slaughter totaled 632,000 head, down 0.2% from last week and down 2.6% from a year ago. The average steer dressed weight for the week ending on September 14 was 867 pounds, down 5 pounds from the week before and down 2 pounds from a year ago.

Oklahoma City feeder cattle auction prices this week were steady to $2 higher for steers and heifers with prices for medium and large frame #1 steers: 400-450# $186-$197, 450-500# $192-$197, 500-550# $169-$192.50, 550-600# $155-$168.50, 600-650# $150-$171, 650-700# $149.50-$172, 700-750# $150-$167, 750-800# $153.50-$161.50, 800-900# $150.25-$158.50, and 900-1000# $141-$149.75/cwt.

The October live cattle futures contract closed at $128.25/cwt today, up $2.30 from last week’s close. December fed cattle settled at $132.07, up $2.32 for the week.

The October feeder cattle futures contract ended the week at $164.12/cwt, up $3.90 from the previous Friday. November feeders settled at $164.92, up $4.17 for the week.

Source: Ron Plain and Scott Brown

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