Cattle Outlook: Drought Continues

US - The August Cattle on Feed report had no big surprises. USDA said placements during July were down 10 per cent and July marketings were down 0.3 per cent. That combination put the August 1 on-feed number 0.7 per cent above the year-ago level, writes Ron Plain and Scott Brown from the University of Missouri.
calendar icon 28 August 2012
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Ron Plain
Ron Plain

The drought continues. USDA's Crop Progress report says only 23% of the corn crop and 31% of the soybean crop are in good or excellent condition. A year ago the numbers were 57% and 59%, respectively. Nationally, 17% of pastures are rated as being in good or excellent condition. A year ago 37% were. USDA says 0% of Missouri pastures are in good or excellent condition. This week's report says 1% of pastures in Missouri are rated as being in fair condition with 12% poor and 87% very poor.

Corn prices continue to set records. The September, December, March and May corn contracts ended the week above $8/bu.

The latest Cold Storage report says the amount of beef in cold storage at the end of July was down 3% from June, but up 10% from a year ago.

Domestic beef demand was up 2% in June compared to 12 months earlier. However, export demand was down 10% leaving fed cattle demand down 1% compared to June 2011. Thus far in 2012, beef demand is outperforming both pork demand and chicken demand.

Beef carcass cutout values edged up a tiny bit this week. On Friday morning, the choice boxed beef carcass cutout value was $193.65/cwt, up 64 cents from last Friday. The select carcass cutout was up 3 cents from the previous week to $184.81/cwt.

Fed cattle prices were mixed this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $120.34/cwt, up 39 cents from last week and up $7.39/cwt from the same week last year. Steer prices on a dressed basis averaged $187.45/cwt this week, down $1.56 from a week ago, but up $7.33/cwt from a year ago.

This week's cattle slaughter totaled 653,000 head, up 1.6% from last week, but down 3.7% from a year ago. The average steer dressed weight for the week ending August 11 was 862 pounds, unchanged from the week before and up 16 pounds from a year ago. That was the 31st consecutive week above year-earlier.

Oklahoma City feeder cattle prices were steady to $3 lower this week with prices for medium and large frame #1 steers: 400-450# $179-195, 450-500# $167.50-$178, 500-550# $151-$166.50, 550-600# $140.50-$152, 600-650# $135-$148, 650-700# $130-$143, 700-750# $130-$142.50, 750-800# $125-$139.50, 800-900# $132-$138, and 900-1000# $126-$130.25/cwt.

The August live cattle futures contract settled at $119.87/cwt, down $1.20 from the previous Friday. The October contract settled at $124.45/cwt, down 82 cents. December closed at $127.87/cwt, down 33 cents from the previous Friday.

September feeder cattle futures ended the week at $142.95/cwt, 75 cents lower than last Friday. October feeders ended the week at $144.42/cwt, up 92 cents for the week.

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