Cattle Outlook
Ron Plain and Scott Brown
Ag Economics, MU
November 13, 2015
Cattle prices continue to be highly variable. Through Thursday on light volume, the 5-area average price for slaughter steers sold on a live weight basis was $126.27/cwt, down $4.17 from last week's average and down $41.26 from a year ago. The 5 area average dressed price this week for slaughter steers was $201.47/cwt, down $3.27 for the week and down $60.53 compared to the same week last year.
This morning the choice boxed beef cutout value was $209.37/cwt, down $6.55 from the previous Friday and down $43.50 from a year ago. The select carcass cutout was $200.94/cwt down $6.44 from last week and down $37.41 from last year.
USDA's November World Agricultural Supply and Demand Estimates predicted U.S. meat production would be up 2.9% in 2016 with pork up 1.7%, beef up 4.8%, broilers up 1.9% and turkey up 7.9%. More meat is likely to mean lower prices. USDA expects hog prices to average $1-$4/cwt lower next year.
This week USDA raised their estimate of corn yield by 1.3 bushels to 169.3 bushels per acre. This is the second highest corn yield ever behind last year's 171 bushels per acre. Corn production is expected to total 13.654 billion bushels, the third highest ever after 2014 and 2013. USDA is predicting the seasonal average corn price will average close to $3.65 per bushel, down 5 cents from the year before.
USDA increased their estimated soybean yield by 1.1 bushels to a record 48.3 bushels per acre. They estimate this year's harvest at a record 3.981 billion bushels. USDA expects the marketing year average price for soybeans to average close to $8.90 per bushel, down $1.20 from the year before.
The average steer dressed weight for the week ending on October 31 was 920 pounds, down 7 pounds from the week before, but up 18 pounds compared to the same week last year, and above the year-ago level for the 72nd consecutive week. This week's average steer dressed weight is 14 pounds heavier than any week prior to September.
Cattle slaughter this week totaled 556,000 head, down 1.2% from the week before and down 1.4% from the same week last year.
Feeder cattle prices at Oklahoma City were $4 to $6 lower this week with stocker calf prices as much as $20 lower. Prices for medium and large frame #1 steers by weight group were: 400-450# $217-$245, 450-500# $205-$241, 500-550# $202-$225, 550-600# $193-$218, 600-650# $170-$205, 650-700# $162.50-$181, 700-750# $160-$181.75, 750-800# $161-$180.50, 800-900# $171-$180.50 and 900-1000#, $169-$174.50/cwt.
Cattle futures were lower this week. The December live cattle futures contract settled at $130.67/cwt today, down $4.26 for the week. February fed cattle settled at $132.65/cwt, down $4.50 from the previous week. November feeder cattle ended the week at $175.07/cwt, down $6.56 from a week earlier. The January contract lost $7.47 this week and closed at $164.55/cwt.