Another week of slow sales of cattle moving took place this week, but keep in mind Monday was a holiday. With an ample supply of beef that needs to be moved in the feedlot and lingering sluggish demand packers do not seem too eager to be aggressive with their bids. Still, some improvement was recognized. In Texas and Kansas, lives sales were light and steady at $85. In Nebraska, cattle were called steady to $0.50 higher, live, at $84-$85 and steady to $1 higher, dressed, at $131. In Iowa/Minnesota, live sales were at $82 and dressed were at $129. In Colorado, cattle were steady at $84.50 on a live basis, $2 higher at $133 dressed on low volume. Cattle slaughter is estimated at 562,000 head this week versus 655,000 head last week and 657,000 head a year ago (562,000 for Labor Day weekend last year.) Hog slaughter is estimated at 2,050,000 this week compared with 2,256,000 head last week and 2,301,000 head a year ago.

A light week for the most part with Monday being a holiday, but cash feeder and stocker cattle were mostly higher this week with some sales coming in lower. In Lexington, KY feeder steers and heifers were $1 to $2 higher; steer calves were $1 to $3 higher while heifer calves were $1 to $3 lower. At West Plains, MO, feeder steers and heifers were steady. In Arkansas markets, feeders were weak to $4 lower for the second week in a row. In Georgia, prices across all classes were called steady to $2 higher.

Mississippi markets were steady this week. Price for steers (medium and large, 1-2) at Mississippi auctions throughout the week were as follows: 200-250 pounds, $125-$135; 250-300 pounds, $118-$125; 300-350 pounds, $110-$120; 350-400 pounds, $100-$110; 400-500 pounds, $95-$105; 500-600 pounds $90-$100; 600-700 pounds $83-$95; 700-800 pounds, $80-$88. Slaughter cows were called $1 lower this week. For the week cows brought $37-$44 for boning cows (850-1,200 lbs) and $35-$41 for lean (850-1,200 lbs).

Live Cattle futures started the week higher, along with most agricultural futures, riding the wave of a stronger general economy. After slowly working higher Monday through Wednesday, prices surged about 75 cents on the nearby contract – with other months higher as well – to start the day Thursday before breaking and moving lower/sideways through Friday as the stock market cooled down a bit and due to the lack of fundamental news coming in on the cash side. Live Cattle closing prices on Friday (with the change from last week’s close in parentheses): October $87.23 (+0.58); December $86.93 (+.024); February $87.55 (-0.03); April $89.85 (+0.42); June $85.88 (+0.34); August $86.45 (+0.30).

Nearby, fall months, feeder cattle futures continued to build on last week’s gains and gained steam through Thursday when the trend cooled and contract prices slid mostly sideways to end the week. The gains are most likely due to the stronger economy, which bodes well for future demand. Spring time contracts, on the other hand, were mostly unchanged. Feeder Cattle futures closing prices on Friday (with change from last week’s close in parentheses) were as follows: September $99.18 (+0.12); October $99.33 (+0.78); November $99.75 (+0.47); January $100.33 (-0.20); March $100.40 (-0.10).

Corn futures were higher this week. Early week gains stemmed from positive general economic news, a weaker US dollar, and higher oil. By mid week trade began to position itself for Friday’s World Agricultural Supply and Demand report (WASDE). This month’s Crop Production report pegs US national average yield at a record 161.9 bushels per acre. Total production is expected to hit 12.955 billion bushels – second only to the 2007 crop. Despite all the mid-season concern about potential losses on a late crop, yield prospects appear to be exceptional in many parts of the country, particularly across the western and northern portions of the Corn Belt. This week’s Crop Progress report called just 8% of the crop mature compared with a 5-year average of 23% for this point in the growing season. For the foreseeable future, though, the weather looks benign enough not to be causing the market any concerns. Yield and production estimates in today’s report matched up very well with pre-report expectations. Another thing to consider is the demand-side figures released in Friday’s WASDE report. USDA increased their estimate of 2008/09 corn use for ethanol production, pulling down carryover from the previous marketing year. In addition, for 2009/10 USDA increased estimates of feed use, ethanol use, and exports. Total use is projected to reach just over 13 billion bushels. If this projection is realized, it will mean that corn stocks will decline despite the harvest of the second largest crop on record. In fact, USDA ending stock projection this month comes in at 1.635 billion bushels, up from last month but down from 2008/09 carryover of 1.695 billion bushels. Pre-report estimates generally undershot USDA’s number, with the average of pre-report carryover estimates at 1.768 billion bushels. This, along with some reductions in global corn production (notably in South America and China), gives this month’s WASDE report at least a slightly friendly tone. Friday’s early drop in futures suggests that the market is placing more weight on the immediate reality of a bin-busting crop than on the potential for strong demand sometime down the road. September and December contracts closed Friday at: $3.14 ½ and $3.19 ¾, respectively.

Wholesale beef prices are were down slightly from last week. Demand continues to be less than stellar and we are now moving away from peak grilling season and into a more dormant time for beef use. The weekly Choice cutout worked out to $142.12 on Friday, down $0.71 cents from last week. The weekly average Select cutout came in at $134.13 on Friday afternoon, down $1.07 from last week’s average.

Source: John Michael Riley and John D. Anderson, Department of Agricultural Economics Mississippi State University