Weekly US Cattle Outlook - Number On Feed Down

US - Weekly Cattle Outlook, 26th October 2007 - Weekly review of the US cattle industry, written by Glenn Grimes and Ron Plain.
calendar icon 29 October 2007
clock icon 3 minute read

The October 1 Cattle on Feed report came in a bit more optimistic than the average of the trade estimates. The number on feed was down 6.2 percent compared to the trade estimate being down 4.3 percent. Placements on feed during September were up 8.9 percent and fed marketings during September were down 3.1 percent.

The futures market for live cattle showed modest increases in prices over Friday at the close on Monday.

The trend in recent months to show reductions in placement of cattle on feed weighing less than 600 pounds was well during September. The number of cattle placed on feed during September weighing less than 600 pounds was down 15.3 percent from a year earlier. The number placed on feed during September weighing 600-699 pounds was up 22.6 percent, the number placed weighing between 700-799 pounds was up 26.7 percent, and the number placed weighing over 800 pounds was up 14.7 percent from 12 months earlier.

This report confirms the beliefs that fed cattle marketings will continue to be tight well into winter.

The closing live cattle futures contract prices on Monday ranged from $94.98 to $99.90 for the next 16 months. The challenge for cattle feeders is to keep feed costs and replacement cattle costs low enough to make a profit.

Cold storage stocks of beef at the end of September were basically the same as a year earlier being down one percent.

Feeder cattle prices were lightly tested and uneven, and steer and heifer calves were uneven, but mostly steady at Oklahoma City this week.

The prices by weight groups for medium and large frame number one steers were: 400-500 pounds $124-125 per cwt, 500-600 pounds $110.50-123 per cwt, 600-700-pound calves $102-110 per cwt, 700-730-pound calves $108.50-110 per cwt, 650-700-pound yearlings $114.75-116 per cwt, 700-800 pounds $109.75-115 per cwt and 800-950 pounds $104-122.75 per cwt.

Based on trade reports, the development of wheat pastures is quite spotty. A major reduction in development of wheat pastures will be negative to feeder calf prices.

Fed cattle prices for the total week last week rallied about $2.50 per cwt from the price through Thursday. The average live five-market price through Thursday at $90.50 per cwt compared to $93.20 for the week.

The fed cattle market was slow to develop again this week, and packers were resisting even holding last week's gain in price. In fact, there were not enough cattle sold for a good test through Thursday.

The live cattle weighted average price for the five-market area through Thursday at $90.10 per cwt was down $0.40 per cwt from a week earlier. The weighted average price for carcass-traded cattle for the five-market area was up $0.57 per cwt at $142.75 per cwt compared to seven days earlier.

The wholesale beef price for Friday morning at $142.44 per cwt for Choice beef was down $2.29 per cwt, and Select beef prices were $3.45 per cwt lower at $129.42 compared to a week earlier.

Slaughter this week under Federal Inspection was estimated at 670 thousand head, up 3.2 percent from the same week in 2006.

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