Weekly US Cattle Outlook: Lowest Stocks Of Frozen Beef Since July 2005

US - Weekly Cattle Outlook, 28th May 2010, a weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.
calendar icon 1 June 2010
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Ron Plain
Ron Plain

There were 373 million pounds of beef in cold storage at the end of April. That is 2.9 per cent less than a month earlier and 9.1 per cent less than a year earlier. More important, it’s the lowest stocks of frozen beef since July 2005.

There were no surprises in USDA’s latest cattle on feed report as the numbers came in very close to pre-release trade forecasts. The inventory of cattle on feed May 1 was down 3.4 per cent compared to a year ago. This is the lowest May 1 inventory since 2004. Placements during April were up 1.8 per cent and the highest for any April since 2005. April marketings were down 0.9 per cent. Feed yards have stayed current on marketings all year and the low on-feed number imply reduced beef production will continue through the summer.

Steer carcase weights averaged 807 pounds during the week ending May 15. That was up 1 pound from the week before, but 13 pounds lighter than a year ago. This was the 25th consecutive week with steer weights below year earlier levels.

On Friday morning, the choice boxed beef carcass cutout value was $1.6418/pound, down 3.3 cents for the week, but 19.83 cents higher than last year. The select cutout was down 4.84 cents from the previous Friday to $1.5628 per pound. The morning’s choice-select price spread (7.9 cents) is the largest since December 18.

The 5-area daily weighted average price for slaughter steers sold through Thursday of this week on a live weight basis was $93.64/cwt, down $3.41 from a week earlier but $9.13 higher than a year ago. Steers sold on a dressed basis this week averaged $151.04/cwt, $3.66 lower than the week before but $15.82 higher than last year.

This week’s cattle slaughter totaled to 671,000 head, down 1.5 per cent from the previous week but up 6.3 per cent compared to the same week last year which was very low because it started with the Memorial Day holiday.

Cash bids for feeder cattle this week were mostly in the range of $1 to $6 lower. The price ranges at Oklahoma City for medium and large frame steers were: 400-450# $132-$136.25, 450-500# $129.50-$137.50, 500-550# $126-$132, 550-600# $120.50-$131.50, 600-650# $113-$120, 650-700# $112.50-$115.50, 700-750# 111-$115.50, 750-800# $107.50-$112.75, and 800-1000# $94.50-$108/cwt.

The June live cattle futures contract ended the week at $90.52/cwt, down 85 cents for the week. August settled at $89.25, down $1.37 from the week before. October settled at $90.77/cwt and December live cattle contract ended the week at $92.30/cwt.

Feeder cattle futures were also lower this week. The August feeder contract lost $1.73 this week, ending at $108.42/cwt. October closed the week at $110, down $2.50 from last Friday.

The July contracted closed the week at $3.59, down 10 cents from the previous Friday. December lost 5 cents this week to end at $3.80.

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