Weekly US Cattle Outlook - Corn Crop Estimate Reduced

US - Weekly Cattle Outlook, 16th November 2007 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.
calendar icon 19 November 2007
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The November estimate of the 2007 corn crop was reduced 150 million bushels from the October estimate. The yield per acre was reduced 1.7 bushels. Ending stocks of corn at the end of the 2007-2008 marketing year were reduced by 100 million bushels in the November estimate from the October estimate.

These lower crop and carryover estimates of the corn crop indicate higher prices for corn. USDA increased their per bushel estimate for corn price for the 2007-2008 corn marking year by $0.30 per bushel from October to November with the November estimate at $3.50 per bushel for the midpoint estimate.

The 2007 soybean crop in the November estimate was reduced by four million bushels from the October estimate to 2.594 billion bushels in November. Carryover stock was reduced by five million bushels to 210 million bushels in November. The estimated soybean price per bushel was raised $0.65 per bushel for a midpoint estimate of $9.00 per bushel in November. The soybean meal price was increased by $15 per ton to $250 per ton for a midpoint estimate in November.

The higher corn prices will add to cattle feeder cost and the cost per cwt will be some higher in 2008 than 2007. The good news is that distillers grain should be some lower in 2008 than 2007.

Cattle feeders won the contest of wills last week. When packers finally blinked, the live price for fed cattle for the five-market area was at $92 per cwt, up $2.35 per cwt from the average through Thursday.

The average of the trade estimates are for the number of cattle on feed on November 1 to be down about two percent from a year earlier. Placements on feed during October are forecast to be up 11 percent from 2006 and marketings of fed cattle through October to be up 7.3 percent from a year earlier.

Beef exports for September were up 32.2 percent from 12 months earlier. For January-September, beef exports were up 26.2 percent from the same months last year. Beef imports for the first nine months of 2007 were up 2.8 percent from 12 months earlier. Net beef imports as a percent of beef production were down from 7.8 percent in the first nine months of 2006 to 7 percent of production this year. Beef trade continues to support the demand for slaughter cattle.

Live cattle imports from Mexico for January-September were down 19.6 percent from a year earlier, but live cattle imports from Canada were up 25 percent for this period from 2006. Total live cattle imports for January-September were up 0.8 percent from a year earlier.

Live fed cattle prices for the five-market area through Thursday at $91.75 per cwt were up $2.10 per cwt from a week earlier. The five-market weighted average price for fed cattle sold in the carcass was $3 per cwt at $145 per cwt from seven days earlier.

Wholesale beef prices Friday morning showed Choice beef at $143.93 per cwt, up $2.99 per cwt from a week earlier. Select beef prices Friday morning were up $4.26 per cwt from last Friday at $133.39 per cwt.

Slaughter this week under Federal Inspection was estimated at 644 thousand head, down 2.4 percent from a year earlier.

Feeder cattle were lightly tested this week at Oklahoma City with steers steady to $1 per cwt higher and steer and heifer calves steady to $2 per cwt lower, except steers under 500 pounds at $2-4 per cwt higher.

The prices by weight groups for medium and large frame Number One steers were: 400-500 pounds $123-139.25 per cwt, 500-600 pounds $108.50-123.50, 600-700 pound calves $95-110.50 per cwt, 700-750-pound calves $103-106.25, 600-700-pound yearlings $99.75-105.25 per cwt, 700-800-pound yearlings $96.25-104.25 per cwt and 800-1,000 pounds $92.25-99 per cwt.

The cattle on feed report came in close to trade expectations. The number on feed November 1 was down 1.7 percent, placements on feed during October were up 11.8 percent and fed marketings during October were up 6.3 percent.

The placements and marketings were increased in part due to one more week day in October of 2007 than in 2006.

There will be no report next week because of the Thanksgiving holiday

TheCattleSite News Desk

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