Slaughter cattle were higher this week with improvement in wholesale prices. In the Southern Plains live prices were $1.50 higher at $85. In Kansas, dressed trade came in at $134. Sales in Nebraska were at $83.50-$84 on a live basis and $132 dressed which is firm to $1 higher. In Colorado, live sales were at $84.50-$85 and dressed sales were at $132-$133. Trade in Iowa/Minnesota came in at $82.50-$83 live and $131-$132 dressed. Cattle slaughter is estimated at 653,000 this week versus 654,000 head last week and 680,000 head a year ago. Hog slaughter is estimated at 2,196,000 this week compared with 2,228,000 head last week and 2,218,000 head a year ago.

Cash feeder cattle were mostly lower this week as were calves. In Oklahoma City, feeder steers and heifers were steady to $1 lower; all calves were called steady. In Lexington, KY heavy steers were weak to $2 lower and heifers were steady to $1 lower; calves were steady to $2 lower. At West Plains, MO, steers over 700 lbs were steady to $3 lower; steers between 450 and 700 lbs were $2 to $4 lower and steers under 450 lbs were $4 to $8 lower. Yearling heifers at West Plains were $2 lower and heifer calves were $2 to $4 lower. In Arkansas markets, feeders were steady to $3 lower. In Georgia, feeder steers were steady $1 lower; steer calves and heavy heifers were steady; heifer calves were steady to $1 higher.

Mississippi markets bucked the trend as feeder classes and calves were mostly higher. Price for steers (medium and large, 1-2) at Mississippi auctions throughout the week were as follows: 200-250 pounds, $130-$140; 250-300 pounds, $120-$130; 300-350 pounds, $115-$125; 350-400 pounds, $107-$115; 400-500 pounds, $95-$105; 500-600 pounds $90-$102; 600-700 pounds $90-$100; 700-800 pounds, $85-$93. Slaughter cows were $1 to $3 lower this week. For the week cows brought $38-$44 for boning cows (850-1,200 lbs) and $35-$43 for lean (850-1,200 lbs).

Live Cattle futures worked lower throughout the week despite a stronger than expected start on Monday. With last week’s Cattle on Feed report indicating more cattle placed than expected and fewer marketed a lower Monday was surely in store. However strength in the general economy spilled over from Friday and held prices up on the day. By Tuesday the air was let out of the balloon that was the big gain in the Dow Jones Industrial average on Friday (up 155 points) which gave the market time to digest the news from the report and thus it backed off a bit. The front month August contract expires on Monday, so, some alignment with cash prices was also in play. Live Cattle futures closing prices on Friday (with change from last week’s close in parentheses) were as follows: August $84.65 (-0.35); October $86.70 (-1.90); December $87.10 (-1.05); February $87.58 (-0.50); April $89.70 (-0.25); June $86.05 (-0.80).

Feeder cattle futures, on the other hand, started the week down just a bit. Corn prices were higher on Monday and that was the primary reason feeder futures were down. As the week moved along feeder futures traded on live cattle happenings as there was little direction from the corn pits for the remainder of the week. Since live cattle moved lower that sent feeder prices down further and they finished the week down pretty hard. From a seasonal standpoint, this is the time of year when feeder prices begin working lower into the fall and winter (more on that below accompanying the feeder seasonality figure). Feeder Cattle futures closing prices on Friday (with change from last week’s close in parentheses) were as follows: September $98.15 (-2.55); October $98.05 (-2.58); November $98.55 (-2.23); January $99.48 (-2.11); March $99.40 (-2.20).

Corn futures were mostly neutral based on the weekly move. Monday contracts moved higher as oil was higher. By Tuesday the gains from Monday were taken back based on sharply lower oil prices, a weaker US dollar and a generally positive Crop Progress report. The remainder of the week the market moved in a sideways pattern. On Friday, September corn closed at $3.21, down ¾ of a cent over last week.

Building on last week’s improvement, wholesale beef prices were higher on the week. The Choice cutout worked out to $143.67 on Friday, up $1.52 cents from last Friday. The Select cutout came in at $136.42 on Friday afternoon, up $1.37 from last Friday.

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