Cattle Outlook

Ron Plain and Scott Brown
Ag Economics, MU
September 23, 2016

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USDA's September Cattle on Feed report said placements were up 15.1% and marketings were up 17.6% compared to August 2015. That left the number of cattle on feed at the start of September at 101.5% of the year-earlier level. The pre-release average of trade predictions was for August placements to be up 13.1%, marketings to be up 17.5%, and the number of cattle on feed at the start of September to be up 1.2%. There were two extra slaughter days this August compared to last.

According to calculations by the Livestock Marketing Information Center, cattle feeders lost $89.75 per head on slaughter steers marketed in August. That compares to losses of $272.28 per head in August 2015.

Fed cattle prices this week were a bit lower on light sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $106.63/cwt, down 35 cents from last week's average and down $21.84 from a year ago. The 5-area dressed steer price averaged $167.90/cwt, down 15 cents from the week before and down $34.58 from a year ago.

Beef cutout value was higher this week. This morning, the choice boxed beef cutout value was $187.17/cwt, up $1.11 from the previous Friday, but down $26.28 from this week last year. The select carcass cutout this morning was $179.31/cwt, up 78 cents from last week, but down $31.37 from a year ago.

This week's cattle slaughter totaled 592,000 head, down 2.0% from last and up 3.1% from a year ago. The average steer dressed weight for the week ending on September 10 was 903 pounds, up 5 pounds from the week before, down 16 pounds from a year ago, and below the year-ago level for the 19th week in a row. Year-to-date cattle slaughter is up 4.4% compared to 2015 and year-to-date beef production is up 4.6%.

USDA's weekly crop progress report said that 18% of U.S. pastures were in poor or very poor condition on September 18. That is up 2 points from the week before, but down 2 points from a year ago.

Feeder cattle prices were $2 to $5 higher this week at the Oklahoma City auction. Stocker cattle prices were steady to $5 higher. Prices for medium and large frame #1 steers by weight group were: 400-450# $157.50-$160, 450-500# $135.25-$162, 500-550# $142-$156, 550-600# $134.50-$146, 600-650# $123-$148.50, 650-700# $133.50-$149, 700-750# $130.25-$145, 750-800# $132.25-$140, 800-900# $126-$139.50 and 900-1000# $119.85-$124.75/cwt.

The October live cattle futures contract settled at $107.27/cwt today, down 60 cents for the week. December fed cattle settled at $106.85/cwt, down $1.20 from the previous Friday. February fed cattle futures settled at $107.10/cwt and April ended the week at $106.47/cwt.

September feeder cattle futures ended the week at $136.82/cwt, up $1.32 from a week earlier. October feeder cattle lost 58 cents this week to settle at $132.37/cwt. November feeder cattle futures closed the week at $129.72/cwt.

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