There were 451 million pounds of beef in cold storage at the end of June. That was up 1.2% from the month before, but down 4.9% from a year ago. June was the fifth consecutive month with stocks of frozen beef below the year ago level.
The U.S. economy grew only 1.2% during the second quarter according to the U.S. Commerce Department. They revised down their estimates of growth during the fourth quarter of 2015 and the first quarter of 2016 to 0.9% and 0.8%, respectively. These numbers decrease the odds of the Federal Reserve Bank raising interest rates anytime soon. Growth this slow is not good for meat demand. The restaurant performance index was down in June for the second consecutive month.
USDA weekly crop progress report said that 15% of U.S. pastures were in poor or very poor condition as of July 24. That is up 1 point from the week before and 3 points higher than a year ago.
After three weeks of price decline, this week fed cattle prices were mixed in very light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $118.00/cwt, up $3.35 from last week's average, but down $27.22 from a year ago. The 5-area dressed steer price averaged $184.09/cwt, down 74 cents from the week before and down $45.13 from a year ago.
This morning, the choice boxed beef cutout value was $197.91/cwt, down $2.45 from the previous Friday and down $11.95 from three weeks ago. The select carcass cutout this morning was $189.86/cwt, down 10 cents from last week. The choice-select spread, $8.05/cwt this morning, the smallest since the last week of February.
This week's cattle slaughter totaled 581,000 head, down 2.4% from last week, but up 9.2% from a year ago. The average steer dressed weight for the week ending on July 16 was 880 pounds, up 5 pounds from the week before, down 4 pounds from a year ago, and below the year-ago level for the 11th consecutive week.
Feeder cattle prices at Oklahoma City were generally $1 to $3 higher this week. Stocker calves were lightly tested. Prices for medium and large frame #1 steers by weight group were: 400-450# $163.50-$179, 450-500# $161-$164, 500-550# $154-$165, 550-600# $148-$166, 600-650# $139-$155, 650-700# $145-$155.50, 700-750# $144.50-$152, 750-800# $138.50-$152.75, 800-900# $132-$140.75 and 900-1000# $126.50-$133.50/cwt.
The July Cattle on Feed report found lower placements during June than expected and that gave a boost to cattle futures this week. The August live cattle futures contract settled at $113.07/cwt today, up $3.12 for the week. October fed cattle settled at $111.72/cwt, up $3.65 from the previous Friday.
August feeder cattle futures ended the week at $140.05/cwt, up $2.85 from a week earlier. October feeder cattle closed the week up $2.75 at $138.57/cwt.