Cattle Outlook: Pasture conditions improve

USDA's May Cattle on Feed report said there were 10.783 million cattle on feed at the start of April. That was 1.3% more than a year ago and the most for any May since 2012. April placements were up a surprising 7.5%. May was the third consecutive month with placements higher than a year ago. April marketings were 1.2% more than in April 2015 despite one fewer slaughter day.

There were 452 million pounds of beef in cold storage at the end of April according to USDA's monthly Cold Storage report. That was down 3.2% from the month before and down 6.6% from a year ago. That is the smallest stocks of frozen beef since the end of 2014. Stocks of pork in cold storage were down 9.4% at the end of April compared to 12 months earlier. Frozen chicken in cold storage was up 5.3% and turkey stocks were up 0.7% compared to a year earlier.

USDA estimates that only 8% of U.S. pastures were in poor or very poor condition on May 22. That is the same as the week before and down 2 points from a year ago.

Fed cattle prices were sharply lower this week in moderate volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $124.81/cwt, down $6.33 from last week's average and down $33.68 from a year ago. The 5-area dressed steer price averaged $196.76/cwt, down $7.27 from the week before and down $52.95 from a year ago.

This morning the choice boxed beef cutout value was $222.31/cwt, down $2.79 from the previous Friday and down $32.80 from a year ago. The select carcass cutout this morning was $201.73/cwt, down $7.12 from last week. The choice-select spread is an astonishing $20.58/cwt, the largest since June 4, 2013.

This week's cattle slaughter totaled 586,000 head, down 0.2% from last week, but up 11.6% from a year ago which was light because of the Memorial Day holiday. The average steer dressed weight for the week ending on May 14 was 863 pounds, up 1 pound from the week before, but down 4 pounds from a year ago. This was the second week that steer weights averaged below the year-ago level since the week ending on June 14, 2014.

Prices for feeder cattle at the Oklahoma City Stockyards were $5 to $10 lower compared to last week. Stocker calf prices were $8 to $15 lower. Prices for medium and large frame #1 steers by weight group were: 400-450# $172-$188, 450-500# $165-$189, 500-550# $150-$171, 550-600# $147-$165, 600-650# $143.50-$162.50, 650-700# $123.50-$169, 700-750# $133-$147.75, 750-800# $135-$143.25, 800-900# $120-$136.50 and 900-1000# $124.50-$130.25/cwt.

The June live cattle futures contract settled at $119.70/cwt today, down $1.35 for the week. August fed cattle settled at $116.42/cwt, down $1.03 from the previous Friday. October ended the week at $115.28/cwt. August feeder cattle futures ended the week at $146.70/cwt, down $1.22 from a week earlier.