CATTLE OUTLOOK – Ron Plain and Scott Brown
Ag Economics, MU October 14, 2016
This week USDA increased their forecast of 2016 beef
production by
0.1% and increased their beef production forecast for 2017
by 0.3%.
They now expect 2017 beef production to be 3.7% higher than
this year
and this year to be 5.4% higher than last year.
USDA reduced their estimate of 2016 corn production by 36
million
bushels to 15.057 billion, which is 841 million bushels
above the 2014
record. They expect the seasonal average farm price of
corn to
average $3.25 per bushel, give or take 30 cents.
Fed cattle prices this week were again lower on heavy sales
volume.
Through Thursday, the 5-area average price for slaughter
steers sold
on a live weight basis was $97.59/cwt, down $3.32 from last
week’s
average and down $25.61 from a year ago. This is the
first week with
live-weight prices under $100/cwt since December 2010.
The 5-area
dressed steer price averaged $153.93/cwt, down $5.13 from
the week
before and down $44.63 from a year ago.
Beef cutout value is lower this week. This morning,
the choice boxed
beef cutout value was $182.57/cwt, down 95 cents from the
previous
Friday. The select carcass cutout this morning was
$172.18/cwt, down
$2.74 from last week. The choice-select price spread
is $10.39/cwt,
the largest for a Friday morning since July.
This week’s cattle slaughter totaled 601,000 head, down 0.7%
from last
week, but up 5.3% from a year ago.
The average steer dressed weight for the week ending on
October 1 was
909 pounds, up 5 pounds from the week before, down 15 pounds
from a
year ago, and below the year-ago level for the 22nd week in
a row.
Feeder cattle prices were steady this week at the Oklahoma
City
auction. Stocker cattle prices were steady to $2
lower. Prices for
medium and large frame #1 steers by weight group were:
450-500#
$120-$144, 500-550# $114-$134, 550-600# $118.50-$132, 600-650#
$111-$127, 650-700# $112.75-$133, 700-750# $114-$131,
750-800#
$120-$129, 800-900# $115.50-$127 and 900-1000#
$112-$120.50/cwt.
Cattle futures ended the week sharply lower, pressured in
part by
higher corn futures. The October live cattle futures
contract settled
at $95.90/cwt today, down $5.97 for the week. December
fed cattle
settled at $97.45/cwt, down $5.60 from the previous
Friday. February
fed cattle futures settled at $99.375/cwt, down $4.425 from
the
previous Friday. April live cattle closed at
$98.775/cwt.
October feeder cattle futures ended the week at
$120.375/cwt, down
$7.245 from a week earlier. November feeder cattle
lost $7.12 this
week to settle at $115.65/cwt. The January contract
closed the week
at $112.00/cwt.
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