Slight Bearish News From On Feed Report

US - A bearish hint was offered from the slightly higher than expected on feed placements on Friday, write Professors Ron Plain and Scott Brown, University of Missouri.
calendar icon 22 September 2014
clock icon 3 minute read
Ron Plain
Ron Plain

Despite last week also being the 29th consecutive week of cattle slaughter being lower than year ago levels, there were only 0.8 per cent fewer cattle in the large feedlots on September 1 than a year earlier.

Placements were down 2.9 per cent during August and marketings were down 9.6 per cent.

The average of pre-release trade predictions was for the number of cattle on feed September 1 to be down 1.0 per cent with August placements to be down 4.0 per cent and August marketings down 9.6 per cent. The number of cattle on feed has been below year-ago each month since August 2012.

Retail beef prices set new records in August. The average price of a pound of choice beef in grocery stores was $6.24, up 28.9 cents from the month before and 88.9 cents higher than a year ago.

This was the seventh consecutive record month for choice beef prices. The average price of all fresh beef at retail was $5.807 per pound in August. That was 25.7 cents higher than the old record set the month before. The August farm-wholesale price spread was 51.7 cents, the most since June 2006.

Boxed beef cutout value was lower this week. The cutout value for choice carcasses this morning was $244.54/cwt, down $5.99 from last Friday, but $52.09 higher than a year ago. The select cutout was $230.64/cwt on today's morning report, down $4.89 for the week, but $54.53 higher than a year earlier.

Fed cattle prices dropped this week on light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis were $153.75/cwt, down $4.95 from last week's average, but up $31.05 compared to a year ago. The 5 area average dressed price for steers lost $4.60 this week to $245.23/cwt.

Cattle slaughter totalled 571 thousand head, down 3.5 per cent from the week before and 9.5 per cent fewer than the same week last year.

This was the 29th consecutive week that cattle slaughter has been below the year-ago level. The average dressed weight for steers slaughtered the week ending September 6 was 889 pounds, up 12 pounds from the week before and 17 pounds heavier than the same week last year.

Feeder cattle prices were steady to $5 higher this week at Oklahoma City. This week's price ranges for medium and large frame #1 steers by weight group were: 400-450# $300-$323, 450-500# $288-$314, 500-550# $254-$283.50, 550-600# $241-$264, 600-650# $239-$261.50, 650-700# $215-$248.50, 700-750# $215-$242, 750-800# $219.50-$230, 800-900# $214.50-$227, and 900-1000# $201-$213.85/cwt.

The October live cattle futures contract closed at $155.62/cwt today, down 65 cents on the week. December fed cattle settled at $158.70/cwt, down 55 cents for the week. The February contract ended the week at $160.25/cwt.

The September feeder cattle contract gained $1.13 this week to end at $230.60/cwt. October feeders closed at $228.72/cwt.

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