Weekly US Cattle Outlook: Feed Market Down

US - Weekly Cattle Outlook, 18th September 2009 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.
calendar icon 25 September 2009
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Ron Plain
Ron Plain

The United States Department of Agriculture (USDA) increased the 2009 corn yield to 161.9 bushels per acre in September, up from 159.5 bushels per acre in August. If the September estimate holds, it will be a new record high.

The higher yield pushed the 2009 estimated corn crop to 12.954 billion bushels, up from 12.761 billion bushels for the August estimate. In September, USDA reduced the 2009-10 corn price estimate per bushel from $3.50 pr bushel in August to $3.35 per bushel because of the larger crop.

The September estimate of the 2009 soybean crop has the yield at 42.3 bushels per acre, up from 41.7 bushels per acre in August. This increased yield pushed the 2009 soybean crop up to an estimated 3.245 billion bushels. The August estimate was 3.199 billion bushels. The 2009 crop is expected to be a record-high crop.

The estimated price for soybean meal for the 2009-10 market year was lowered to $280 per ton midpoint estimate from $290 per ton in August.

These lower feed prices will reduce feed costs some for feeding cattle and will be positive for feeder cattle prices.

Beef and veal exports in July were down 11.3 per cent from a year earlier. For January-July, beef exports were up 0.3 per cent from 12 months earlier.

For the first seven months of 2009 our exports to Mexico were down 16.1 per cent, to Canada down 14.6 per cent, to Japan up 12.2 per cent, to Taiwan down 10.5 per cent, to South Korea up 993.8 per cent, to Vietnam up 23.4 per cent, to Hong Kong up 103.7 per cent, to the Bahamas up 30.7 per cent and to other countries down 8.1 per cent from a year earlier.

Beef and veal imports for January-July were up 13 per cent from last year. So far this year our beef and veal imports from Canada are down 3.4 per cent, from Australia up 48.2 per cent, from New Zealand up 6.3 per cent, from Uruguay up 54.1 per cent, from Brazil up 1.3 per cent, from Argentina up 6 per cent, from Nicaragua down 19.6 per cent, from Mexico up 18.3 per cent, from Costa Rica up 30.7 per cent, from Honduras down 40.59 per cent and from other countries down 16.4 per cent.

Net beef and veal imports as a percent of production for January-July at 4.47 per cent were up from 3.09 per cent in 2008.

Live feeder cattle imports from Mexico were up 22.5 per cent for January-July compared to the same months last year. Live cattle imports from Canada for January-July were down 31.8 per cent from 12 months earlier. Total live cattle imports for the last seven months of 2009 were down 16.1 per cent from a year earlier.

Retail beef prices in August were up 0.9 per cent from July 2009 but down 6.8 per cent from August 2008.

Feeder cattle at Oklahoma City this week were steady to $2.00 per cwt higher than two weeks ago. The most advanced price was on calves.

The prices for medium- and large-frame Number One steers were: 400-500 pounds $107-126 per cwt, 500-600 pounds $105-110 per cwt, 600-700-pound calves $98-105.25, 600-700-pound yearlings $102.25-110 per cwt, 700-800 pounds $97.50-103 per cwt, and 800-1,000 pounds $90.10-97.25 per cwt.

Wholesale beef prices Friday morning showed Choice beef at $141.18 per cwt, down $0.23 per cwt from a week earlier. Select beef at $133.60 per cwt was down $0.13 per cwt from seven days earlier.

The weekly weighted average live price for the five-market area through Thursday at $83.55 per cwt was up $0.72 per cwt from a week earlier. The weighted average negotiated carcass price for the week through Thursday at $129.71 per cwt was down $0.72 per cwt from seven days earlier.

Slaughter this week under Federal Inspection was estimated at 645 thousand head, down 5.3 per cent from a year earlier.

The trade estimate for 1 September cattle on feed is for a decline of 1.8 per cent from last year. The number of cattle placed on feed during August is expected to be up 0.9 percent and fed marketings during August to be down 4.7 per cent from 12 months earlier.

The cattle on feed report for 1 September came in relatively close to the trade expectations. The on feed number was down 1.2 per cent, the trade estimate was for a 1.5 decline. Placements on feed during August were up 2.4 per cent, the trade estimate was for an increase of 1 per cent and marketing during August was down 3.9 per cent, the trade estimate was for a decline of 4.7 per cent.

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