Grimes and Plain Weekly Cattle Outlook

CHICAGO - Dec 15/06 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

Beef exports in October were up 64.9% from 12 months earlier. For January-October beef exports in 2006 were up 78.5% from a year earlier.

Our growth in beef exports by country were: Canada up 153.4%, Mexico up 60.7%, Caribbean up 66.3%, Taiwan up 155.8% and other up 35.4%. Beef imports for January-October were down 14.9% from last year. Net beef imports as a percent of production for January-October dropped from 12.27% in 2005 to 7.58% in 2006. This is the major reason why the demand for live fed cattle is up so far this year while consumer demand for beef is down.

Live cattle imports in October 2006 were down 4.8% from 12 months earlier. However, for January-October live cattle imports were up 44.2% from a year earlier. Remember live cattle imports from Canada were banned last year until July because of BSE.

Agents from the U.S. Department of Homeland Security's Immigration and Customs Enforcement division and other law enforcement agencies commenced interviews with employees at six Swift and Co. production facilities on Tuesday. Swift cattle operation was interrupted on Tuesday and production was slowed the remainder of the week.

How much this operation will have on cattle slaughter this week is unknown. Probably, not too much, because cattle slaughter through Thursday was down 17 thousand head from a week earlier and down 13 thousand head from a year earlier.

USDA in their update of the supply and use of corn for the 2006-2007 marketing year did not change use, but increased corn priced by $0.10 per bushel from 9 months earlier. The new estimate is $2.90-3.30 per bushel from $2.80-3.20 a month earlier. The December price estimate for soybean meal at $165-190 per ton was the same as a month earlier.

Feeder cattle prices at Oklahoma City this week were $1-3 per cwt higher than 7 days earlier. Steer and heifer calves under 500 pounds were steady to $2 higher, over 500 pounds were steady to firm.

The prices by weight groups for medium and large frame number one steers at Oklahoma City this week were: 400-500 pounds $127.25-141.00 per cwt, 500-600 pounds $105.50-126.00 per cwt, 600-700 pound calves $97.50-105.50 per cwt, 600-700 pound yearlings $103.00-108.25 per cwt, 700-800 pounds $101.00-106.50 per cwt and 800-1,000 pounds $93.75-105.50 per cwt.

The weighted average price live for the five-market area through Thursday at $85.10 per cwt was down %0.50 per cwt from a week earlier. The weighted average carcass price was down $1.30 per cwt at $134.20 per cwt through Thursday.

Wholesale beef prices for Choice quality this Friday morning was at $144.63 per cwt, up $2.10 per cwt from a week earlier. Select beef price Friday morning was up $1.04 per cwt at $126.28 per cwt from 7 days earlier.

Slaughter this week under Federal Inspection was estimated at 645 thousand head, up 4.6% from 12 months earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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