Cattle Outlook: Feeder Market Rising
The feeder cattle market is on the rise while exports continue to hold strong.
By: Ron Plain and Scott Brown, University of Missouri
Feeder cattle contracts cracked the $200 ceiling this week with August through November contracts ending above $200/cwt. The August feeder cattle contract ended the week at $200.53/cwt, up $3.48 for the week. The September feeder cattle contract settled at $200.87, up $2.75 from the previous Friday.
U.S. beef exports continue to be strong despite record prices. April exports were 15.0% greater than in April 2013 with Hong Kong, South Korea and Mexico accounting for most of the increase. Beef exports during the first third of 2014 were up 7.2% compared to January-April 2013.
Beef imports during April were up 17.1% with Australia accounting for most of the increase. Total beef imports during the first third of 2014 are up 5.5% compared to January-April 2013. Beef imports equaled 13.3% of U.S. beef production while exports equaled 10.1% of production.
April imports of live cattle from Canada were up 17.1% compared to the year before. April cattle imports from Mexico were up 9.3%.
USDA said this week that 19% of U.S. pastures were in poor or very poor condition on June 1, down 2 points from the previous week and down from 25% poor or very poor a year ago.
Fed cattle prices were higher this week on light sales volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $145.13/cwt, up 97 cents from last week's average and up $21.73 from a year ago. The 5 area average dressed price for steers was $231.84/cwt, up $1.08 for the week and up $36.04 from the same week last year.
Beef prices were lower this week. This morning, the boxed beef cutout value for choice carcasses was $229.94/cwt, down $3.38 from the previous Friday, but up $28.00 from a year ago. The select carcass cutout was $221.16/cwt, down $1.56 from last week, but up $37.15 from a year earlier.
This week's cattle slaughter totaled 614,000 head, up 14.3% from the previous week's holiday shortened total, but down 5.2% from the corresponding week last year. The average dressed weight for steers slaughtered the week ending on May 24 was 843 pounds, up 3 pounds from the week before, but down 3 pounds compared to the same week last year.
Feeder cattle prices at this week's Oklahoma City auction were $2 lower to $6 higher than the week before. This week's prices for medium and large frame #1 steers by weight were: 400-450# $244-$262, 450-500# $224-$257.50, 500-550# $217-$245, 550-600# $217-$242, 600-650# $205-$227, 650-700# $194.50-$214.50, 700-750# $192.50-$206.50, 750-800# $184.75-$195.25, 800-900# $172-$186.75, and 900-1000# $164-$174.60/cwt.
The June live cattle futures contract closed at $140.12/cwt today, up $2.32 from last week's close. August fed cattle settled at $141.30/cwt, up $2.70 for the week. The October contract ended the week at $144.50/cwt.
