Cattle Outlook: Cattle on Feed Report Neutral for Market

US - USDA's February Cattle on Feed reports said the number of cattle in large feedlots on February 1 was down a tiny 0.04 per cent compared to a year ago, write Ron Plain and Scott Brown, Ag Economics, Missouri University.
calendar icon 23 February 2016
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Ron Plain
Ron Plain

January placements of cattle into feedlots were down 0.6 per cent and January marketings were down 2.2 per cent. The report should be neutral for the market.

The trade was expecting January placements to be down 0.7 per cent, January marketings down 2.2 per cent, and the February 1 inventory of cattle on feed down 0.2 per cent compared to a year ago.

The Bureau of Labor Statistics says the average January price of choice beef at retail was $5.975 per pound. Grocery store prices averaged 0.3 cents higher than in December, but were 35.8 cents lower than in January 2015. The average retail price for all fresh beef was $5.756 during January, the lowest since July 2104.

The 5 area average price for slaughter steers during January, $134.50/cwt, was up $9.80 from the month before, but down $29.90 compared to 12 months earlier.

Fed cattle prices were mixed this week in light volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $130.00/cwt, down $1.70 from last week's average and down $30.03 from a year ago. Dressed steer prices averaged $209.63/cwt. That is up $3.07 from the week before, but down $46.73 from a year ago.

This morning the choice boxed beef cutout value was $212.26/cwt, down $4.41 from the previous Friday and down $27.86 from a year ago. The select carcass cutout was $208.54/cwt, down $4.54 from last week and down $28.32 from a year ago.

This week's cattle slaughter totaled 521,000 head, down 4.2 per cent from last week and down 0.2 per cent from a year ago.

The average steer dressed weight for the week ending on February 6 was 899 pounds, up 1 pound from the week before and up 15 pounds from a year ago. This was the 86th consecutive week with steer weights above the year-ago level.

Prices at the Oklahoma City Stockyards this week were steady to $3 higher on feeder steers and steady on calves compared to last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $210-$218, 450-500# $204-$209, 500-550# $185-$202, 550-600# $168-$187, 600-650# $161.50-$177.50, 650-700# $157-$169.50, 700-750# $146-$159, 750-800# $147-$156.50, 800-900# $140-$151.75 and 900-1000# $140-$143.50/cwt.

Cattle futures were higher this week. The February live cattle futures contract settled at $135.37/cwt today, up $5.42 for the week. April fed cattle settled at $133.95/cwt, up $4.83 from the previous week. The June contract ended the week at $123.15/cwt, up $3.53 from the previous Friday.

March feeder cattle ended the week at $155.87/cwt, up $5.85 from a week earlier. April futures gained $5.12 this week to close at $154.62/cwt. May feeder cattle settled at $152.95/cwt.

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