Weekly US Cattle Outlook - Choice beef prices up

US Weekly Cattle Outlook, 23rd March 2007 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.
calendar icon 24 March 2007
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We reached a milestone last week with this letter. It was the 1,000 issue sent out electronically.

Choice beef prices in February shot up 2.8% from January, but were still 0.2% below February of 2006. For January and February Choice beef prices this year were 1.6% below 12 months earlier.

For January and February, the total marketing margin for beef was up 2.2% from a year earlier with all of the increase at the packer level.

Fed cattle prices at the five-market area for steers averaged $88.60 per cwt --- down 4% from a year earlier. Live fed cattle demand for December, January and February of this year showed a decline of 0.4% from 12 months earlier.

The trade estimates of the number of cattle on feed March 1 shows a decline of 3.7% from a year earlier and down 1.3% from a month earlier. The average trade estimate shows placements during February up 2.5% from last year, but down 3.1% from January, which was down 23.1% from January of 2006.

If the report comes in close to these estimates, fed cattle supplies will continue to be tight through spring and fed cattle prices will continue strong.

At Oklahoma City this week feeder steers were mostly steady with the exception of 800-825 pounds, which were $1-2 per cwt lower; stocker heifers under 650 pounds were steady with a week earlier. Stocker steers were steady with 7 days earlier.

The range in prices by weight groups for medium- and large-frame number one steers at Oklahoma City this week were: 400-500 pounds $126-139.50 per cwt, 500-600 pounds $117-131 per cwt, 700-800 pounds N/A-$113 per cwt and 800-1,000 pounds $93.50-103.50 per cwt.

Negotiated trade on fed cattle was slow to develop with only 60 thousand head changing ownership through Thursday as packers tried to contain fed cattle prices.

The weighted average live price for fed cattle for the five-market area through Thursday was down $0.35 per cwt at $98.10 per cwt from a week earlier. Negotiated weighted average carcass price for the five-market area at $157.50 per cwt down $1.75 per cwt from 7 days earlier.

Wholesale beef prices for Choice beef Friday morning were down $6.51 per cwt at $158.13 per cwt. Select beef wholesale price at $148.50 per cwt, down $7.59 per cwt from a week earlier.

Slaughter this week under Federal Inspection was estimated at 640 thousand head, up 9.4% from a year earlier.

The March 1 Cattle on Feed report came in very close to trade expectations. The trade average estimate for number on feed was for a decline of 3.7%. USDA estimate shows a decline of 3.5%. However, both marketings and placements during February were larger than the trade estimate. This report should be relatively neutral as to market impact unless the trade was trading different values than the trade estimate.

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