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Record Grain Harvest Is Good News For Feeders
The August WASDE predicts this fall will bring our first 15 billion bushel corn harvest and the first 4 billion bushel soybean harvest. This is good news for feeder cattle prices.
U.S. beef exports during June were down 0.5 percent compared to a year ago. Japan, South Korea, Canada and Mexico, respectively, were the top three destinations for U.S. beef exports in June. Beef exports were up 2.0 percent during the first half of 2016.
Beef imports were down 16.3 percent in June and down 13.0 percent in the first half of 2016. A lot less beef is coming in from Australia because of better grazing conditions there.
Imports of live cattle from Canada were down 6.9 percent in June and down 10.4 percent in the first half of 2016. Cattle imports from Mexico were down 42.6 percent in June and down 16.0 percent in the first half compared to January-June 2015.
Domestic demand for beef was up 2.2 percent in June, but down 1.8 percent in the first half of 2016. Lackluster growth in the U.S. economy has left meat demand slightly lower than last year. Overall meat demand was down 1.1 percent during January-June compared to a year earlier. Export demand for U.S. beef was down 7.0 percent in June and down 5.0 percent in the first half of 2016.
This week fed cattle prices were lower in moderate sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $116.91/cwt, down $2.03 from last week’s average and down $35.82 from a year ago. The 5-area dressed steer price averaged $186.86/cwt, down $1.06 from the week before and down $52.43 from a year ago.
Beef cutout was higher this week. This morning, the choice boxed beef cutout value was $201.51/cwt, up $2.56 from the previous Friday. The select carcass cutout this morning was $193.51/cwt, up $3.06 from last week.
This week’s cattle slaughter totaled 581,000 head, down 0.7 percent from last week, but up 6.8 percent from a year ago. The average steer dressed weight for the week ending on July 30 was 883 pounds, up 3 pounds from the week before, down 3 pounds from a year ago, and below the year-ago level for the 13th consecutive week.
Feeder cattle prices and stocker calf prices at Oklahoma City were generally steady to $4 higher this week. Prices for medium and large frame #1 steers by weight group were: 400-450# $175-$177, 450-500# $164-$177, 500-550# $147-$169.50, 550-600# $148-$166.50, 600-650# $147-$169, 650-700# $147-$161.50, 700-750# $145.50-$159.35, 750-800# $145.50-$156, 800-900# $138.25-$148 and 900-1000# $133.50-$142.75/cwt.
The August live cattle futures contract settled at $116.32/cwt today, down $1.35 for the week. October fed cattle settled at $114.52/cwt, down $1.00 from the previous Friday. December fed cattle futures settled at $115.05/cwt.
August feeder cattle futures ended the week at $149.07/cwt, down 58 cents from a week earlier. September feeder cattle gained 35 cents this week to settle at $147.55/cwt. October feeder cattle closed the week up 38 cents at $144.25/cwt. ∆
DR. RON PLAIN AND DR. SCOTT BROWN: Agricultural Economists, University of Missouri
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