Cattle Outlook: Fed cattle prices lower

USDA released their June Cattle on Feed report this afternoon. It said there were 2.2% more cattle on feed than on June 1, 2015. May placements were up 9.6% and May marketings were up 4.9% compared to a year ago. The number of cattle on feed was the highest for any June since 2012. Both placements and marketings in May were above the year ago level for the fourth consecutive month. There were few surprises as the report came in very close to expectations.

There were 447 million pounds of beef in cold storage at the end of May. That is 1.4% less than the month before and 5.9% less than on May 31, 2015.

Yesterday's vote by the United Kingdom to leave the European Union has strengthened the U.S. dollar. That is likely to have a negative impact on U.S. exports.

USDA weekly crop progress report said that 9% of U.S. pastures were in poor or very poor condition as of June 19. That is up 1 point from the week before and the same as a year ago.

Fed cattle prices were lower this week in moderate volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $116.09/cwt, down $4.94 from last week's average and down $32.59 from a year ago. The 5-area dressed steer price averaged $187.82/cwt, down $7.21 from the week before and down $50.19 from a year ago.

This morning the choice boxed beef cutout value was $214.00/cwt, down $8.98 from the previous Friday and down $40.53 from a year ago. The select carcass cutout this morning was $198.38/cwt, down $2.12 from last week and down $51.30 compared to last year. The choice-select spread, $15.62/cwt this morning, remains high but is down from record levels earlier this month.

This week's cattle slaughter totaled 608,000 head, up 0.2% (1,000 head) from last week and up 8.8% from a year ago. The average steer dressed weight for the week ending on June 11 was 864 pounds, unchanged from the week before and down 5 pounds from a year ago.

Feeder cattle prices at Oklahoma City this week were $2 to $6 lower than last week. Stocker calf prices were $10 to $15 lower. Prices for medium and large frame #1 steers by weight group were: 400-450# $149, 450-500# $153, 500-550# $144.50-$156.50, 550-600# $144-$154, 600-650# $138.50, 650-700# $141.50-$143, 700-750# $132.50-$144.50, 750-800# $125-$143.75, 800-900# $130.50-$138.75 and 900-1000# $120-$128.75/cwt.

The June live cattle futures contract settled at $114.70/cwt today, down $2.57 for the week. August fed cattle settled at $110.87/cwt, down $2.48 from the previous Friday. October ended the week at $110.87/cwt.

Corn futures were sharply lower this week, which helped boost feeder cattle futures. August feeder cattle futures ended the week at $139.45/cwt, up $2.03 from a week earlier. October feeder cattle closed the week up $1.35 at $136.80/cwt.