Grimes and Plain Weekly Cattle Outlook

CHICAGO - May 4/07 - SNS -- Following is a week ending cattleDemand for the major meats at the consumer level continues to be relatively weak. For January - March 2007 pork demand was down 1.7%, beef demand down 0.8% and broiler demand down 6.4%.

Live fed cattle demand shows modest growth with a gain of 1.9% for January - March compared to the same months in 2006. All of the live fed cattle demand growth is probably due to larger exports and smaller imports of beef. For January - February 2007 the net beef exports, as a percent of production, declined from 10.12% in 2006 to 7.70% in 2007.

Cow slaughter in total is slowing but dairy cow slaughter in recent weeks is increasing, probably due to the industry reduction program. Total cow slaughter for the year through April 14 was up 13.9%, dairy up 15% and beef up 15.3%. For the four weeks ending March 31, total slaughter of cows was up 21.3%, dairy slaughter was up 18.5% and beef cow slaughter was up 23.9%. However, for the two weeks ending April 14, total cow slaughter was up 11.9%, dairy cow slaughter was up 21.2% and beef slaughter was up 4% compared to the same period last year. The development of pastures and ranges are no doubt the reason for the decline in beef cow slaughter.

Feeder cattle prices this week at Oklahoma City were $1-3 per cwt higher than a week earlier, stocker cattle were $3-5 higher and steer and heifer calves were steady in a light test.

The prices by weight groups for medium- and large-frame number one steers this week were: 400-500 pounds $127-134 per cwt, 500-600 pounds $129.50-132.75 per cwt, 600-650 pound calves $110.50-117 per cwt, 600-700 pound yearlings $112.50-131 per cwt, 700-800 pounds $106-117 per cwt and 800-1,000 pounds $93.25-108 per cwt.

Replacement cows continue to show only a modest differential over slaughter cows. At Oklahoma City this week cows pre-tested for bangs, pregnancy and age, found some 2-4 year-old cows weighing 950-1,175 pounds, bred 5-7 months, high-quality at $810-925 per head. Cow-calf pairs showed 2-4 year-old cows weighing 800-1,000 pounds, with calves weighing 125-250 pounds, high-quality selling for $1,320-1,400 per head.

Wholesale beef prices continued under pressure this week with Choice beef Friday morning at $155.64 per cwt, down $2.74 per cwt from a week earlier. Select beef prices were down $1.65 per cwt at $144.19 per cwt.

The weighted average prices for live fed cattle for the five-market area showed the price at $95.70 per cwt through Thursday, down $0.56 per cwt from a week earlier. The weighted average negotiated carcass price for the five-market area was down $0.50 per cwt at $154.00 per cwt.

The high in fed cattle prices for this spring is probably history, but the decline in prices into summer is likely to be near normal.

Slaughter this week under Federal Inspection was estimated at 666 thousand head, up 6.1% from a year earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express of an implied promise, guarantee or implication by of from the author(s) that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.