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Weekly US Cattle Outlook: Federally Inspected Cattle Slaughter Up

26 May 2009
Ron Plain
Ron Plain

US - Weekly Cattle Outlook, 22nd May 2009 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.

Fed cattle prices were steady to slightly lower this week. The 5-area daily weighted average price for slaughter steers sold through Thursday was $85.09/cwt on a live weight basis, down two cents from a week earlier and $9.31 lower than a year ago. Steers sold on a dressed basis averaged $136.21/cwt, 31 cents lower than the week before and $12.70 lower than the same week of 2008.

Choice boxed beef cutout values also were slightly lower this week. On Friday morning, the choice carcass cutout value was $1.4576/pound, down 0.83 cents for the week and 10.83 cents lower than a year ago. The select cutout was down 2.7 cents from the previous Friday to $1.4053 per pound. The choice-select spread is currently 5.23 cents which is unusually low. But, it is the highest this week for any time since January.

Federally inspected cattle slaughter for this week was 678,000 head, up 0.9 percent from the week before and down 6.0 percent compared to a year ago.

Through the week ending May 9, 2009 dairy cow slaughter was up 11.9 percent but beef cow slaughter was down 5.1 percent compared to the same period last year.

During the first quarter of 2009, live cattle imports from Canada were down 26.86 percent but cattle imports from Mexico were up 39.08 percent. Total cattle imports were down 10.26 percent.

Steer carcass weight averaged 822 pounds for the week ending May 9, up 2 pounds from the week before and up 12 pounds from the same week in 2008. Steer carcass weights have not been below year-earlier levels since late November.

Cash bids for feeder cattle were mixed this week. The price ranges at Oklahoma City for medium and large frame steers were: 450-500# $121-$127.75, 500-550# $123-$127.50, 550-600# $114.50-$120, 600-650# $109-$116.25, 650-700# $104-$109.25, 700-750# $101-$105.10, 750-800# $96.25-$100.50, and 800-1000# $82.50-$99.85/cwt. Seven weight steers are about $9/cwt lower than this time last year, despite corn prices being more than $1/bushel lower. However, are enduring a prolonged period of red ink. May of 2007 was the last profitable month for cattle feeding.

The June live cattle futures contract ended the week at $82.52/cwt, up $0.15 for the week. August settled at $83.77, up $1.25 from the week before. October settled at $89.55/cwt and the December live cattle contract ended the week at $91.15. August feeder cattle futures ended the week at $101.92/cwt, up 27 cents from the previous Friday. September feeders gained 18 cents to settle at $102.15.

There were no big surprises in the latest cattle on feed report. The May cattle on feed report said placements during April were up 4.2 percent compared to April 2008. The prerelease trade forecast was for placements to be up 6.3 percent. April marketings were reported to be down 6.9 percent according to USDA. Trade estimate was that marketings were down 5.8 percent. The number of cattle on feed on May 1 was down 2.9 percent. The trade expected it to be down 3.0 percent.

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