This week USDA increased their forecast of 2016 beef production by 0.1% and increased their beef production forecast for 2017 by 0.3%. They now expect 2017 beef production to be 3.7% higher than this year and this year to be 5.4% higher than last year.
USDA reduced their estimate of 2016 corn production by 36 million bushels to 15.057 billion, which is 841 million bushels above the 2014 record. They expect the seasonal average farm price of corn to average $3.25 per bushel, give or take 30 cents.
Fed cattle prices this week were again lower on heavy sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $97.59/cwt, down $3.32 from last week's average and down $25.61 from a year ago. This is the first week with live-weight prices under $100/cwt since December 2010. The 5-area dressed steer price averaged $153.93/cwt, down $5.13 from the week before and down $44.63 from a year ago.
Beef cutout value is lower this week. This morning, the choice boxed beef cutout value was $182.57/cwt, down 95 cents from the previous Friday. The select carcass cutout this morning was $172.18/cwt, down $2.74 from last week. The choice-select price spread is $10.39/cwt, the largest for a Friday morning since July.
This week's cattle slaughter totaled 601,000 head, down 0.7% from last week, but up 5.3% from a year ago.
The average steer dressed weight for the week ending on October 1 was 909 pounds, up 5 pounds from the week before, down 15 pounds from a year ago, and below the year-ago level for the 22nd week in a row.
Feeder cattle prices were steady this week at the Oklahoma City auction. Stocker cattle prices were steady to $2 lower. Prices for medium and large frame #1 steers by weight group were: 450-500# $120-$144, 500-550# $114-$134, 550-600# $118.50-$132, 600-650# $111-$127, 650-700# $112.75-$133, 700-750# $114-$131, 750-800# $120-$129, 800-900# $115.50-$127 and 900-1000# $112-$120.50/cwt.
Cattle futures ended the week sharply lower, pressured in part by higher corn futures. The October live cattle futures contract settled at $95.90/cwt today, down $5.97 for the week. December fed cattle settled at $97.45/cwt, down $5.60 from the previous Friday. February fed cattle futures settled at $99.375/cwt, down $4.425 from the previous Friday. April live cattle closed at $98.775/cwt.
October feeder cattle futures ended the week at $120.375/cwt, down $7.245 from a week earlier. November feeder cattle lost $7.12 this week to settle at $115.65/cwt. The January contract closed the week at $112.00/cwt.