Beef Trade Encouraging to Cattle Market

July 16, 2010 05:10 AM
 

By Glenn Grimes & Ron Plain, University of Missouri economist

Beef exports in May were up 26.8% compared to a year earlier. Our two biggest foreign customers, Mexico and Canada purchased less U.S. beef in May, but Japan, South Korea, Vietnam and Egypt purchased a lot more than in May 2009. In total, 9.7% of U.S. May beef production was exported.

Beef imports were down 2.2% in May. Australia and Brazil shipped less to us while Canada and New Zealand sent us more beef than in May 2009. May beef imports equaled 11.1% of U.S. production.

The overall trend in beef trade is quite encouraging. For the first five months of the year, beef imports were down 16.3% and beef exports were up 26.3%.

Cattle imports from Mexico and Canada were both down from April but up compared to May 2009.

The boxed beef cutout declined just a bit this week. On Friday morning, the choice boxed beef carcass cutout value was $1.5421/pound, down 0.27 cents for the week, but 17.74 cents higher than last year. The select cutout was down 0.08 cents from the previous Friday to $1.4465 per pound.

Fed cattle prices rose for the third week in a row. The 5-area daily weighted average price for slaughter steers sold through Thursday of this week on a live weight basis was $93.41/cwt, up $1.58 from a week earlier and $10.41 higher than a year ago. Steers sold on a dressed weight basis this week averaged $150.20/cwt, $1.96 higher than the week before and $20.76 higher than last year.

This week's cattle slaughter totaled 666,000 head, up 10.6% from the previous week (which was low because of Independence Day) and up 5.0% compared to the same week last year. Year-to-date, beef production is down 1%.

Steer carcass weights averaged 827 pounds during the week ending July 3. That was up 3 pounds from the week before, but 13 pounds lighter than a year ago. This was the 32nd consecutive week with steer weights below year earlier levels.

Cash bids for feeder cattle this week were mostly in the range of $2 lower to $2 higher. Because of the Independence Day holiday Oklahoma City did not have a sale this week. The price ranges at Oklahoma City for medium and large frame steers were: 400-450# $137.50-$146, 450-500# $133-$139, 500-550# $132-$138.50, 550-600# $120-$128, 600-650# $112-$124, 650-700# $108-$119.50, 700-750# $112-$116.50, 750-800# $111.25-$115.50, and 800-1000# $98.50-$111/cwt.

The August fed cattle futures contract ended the week at $92.27/cwt, up $2.07 compared to the previous Friday. The October contract gained $2.22 this week to end at $93.62/cwt. The December contract settled at $95.65 and February ended the week at $96.83.

Feeder cattle futures ended the week slightly lower as corn prices moved higher.


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