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Higher Fed Cattle Futures Boosts Futures For Feeders
This is New Year’s week and the number of cattle reports is smaller than normal. Boxed beef prices rose for the second week in a row. This morning the boxed beef cutout value for choice carcasses was $248/cwt, up $3.39 from the previous Friday and up $45.73 from a year ago. The select carcass cutout was $238.97/cwt this morning, up $3.06 from last week and up $41.60 from a year ago.
Fed cattle prices were also higher this week on moderate sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $165.93/cwt, up $3.92 from last week's average and up $28.47 from a year ago. The 5 area average dressed price for steers was $264.79/cwt, up $7.82 for the week and up $47.65 from this week last year. This week’s fed cattle prices are the highest since the first week of December.
Cattle slaughter this week totaled 452,000 head, up 15.6 percent from Christmas week, but down 13.9 percent from New Year’s week last year.
The average steer dressed weight for the week ending on December 20 was 892 pounds, down 7 pounds from the week before, but up 21 pounds compared to the same week last year. For all of 2014, steer dressed weights averaged about 1 percent heavier than in 2013.
Because of the holidays, many of the nation’s feeder cattle auctions were canceled this week, including Oklahoma City. This week’s prices for medium and large frame #1 steers by weight group on light volume at Missouri auctions were: 400-450# $292.50-$321, 450-500# $259-$312, 500-550# $248-$306, 550-600# $241.50-$267.25, 600-650# $227-$260, 650-700# $217.75-$249, 700-750# $206.50-$234.50, 750-800# $215-$220.25/cwt.
The February live cattle futures contract today settled at $165.67, up $3.20 for the week. April fed cattle settled at $164.57/cwt, up $3.10 from the previous Friday. The June contract closed at $157.05/cwt with a gain of $4.25 for the week.
Nearby corn futures lost 19 cents per bushel this week. That and higher fed cattle futures gave a strong boost to feeder cattle futures. The January feeder cattle contract ended the week at $223.95/cwt, up $10.23 for the week. March feeders closed at $221.45/cwt, up $9.56 compared to last Friday. April feeders ended the week $9.62 higher at $222.32/cwt. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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