Grimes and Plain Weekly Cattle Outlook

CHICAGO - Oct 1/07 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

The September 1 Cattle on Feed report showed the number on feed down 4.8 percent, the number placed on feed during August down 17.2 percent, and the number of fed cattle marketed during August up 2.5 percent from a year earlier. The report indicates fed cattle marketings will be below a year earlier into winter.

The futures market live cattle contracts responded to the report with modest increases in prices on Monday, September 24.

The weights of cattle placed on feed during August showed a sharp drop in numbers weighing less than 700 pounds. The number of cattle placed during September weighing less than 600 pounds was down 36.8 percent, the number weighing between 600-699 pounds was down 22.6 percent, the number placed weighing 700-799 pounds was down 9.2 percent, and the number placed weighing over 800 pounds was up 2.0 percent from August of 2006.

Demand for beef at the consumer level for January-August was up 0.8 percent from twelve months earlier. The demand for live cattle in the first eight months of 2007 continues to be the bright demand figure for the beef industry, up 3.8 percent compared to twelve months earlier. Much of the increase in live cattle demand is due to larger beef exports. Net beef imports for January through August declined from 8.4 percent of production in 2006 to 7.7 percent of production in 2007.

Feeder cattle and calf prices at Oklahoma City this week were steady with a week earlier. The price ranges by weight groups for medium and large frame Number one steers at Oklahoma City this week were: 400-500 pounds $125-$140 per cwt, 500-600 pounds $117.50-$129 per cwt, 600-700-pound calves $105-$122.50 per cwt, 600-700-pound yearlings $121-$125 per cwt, 700-800 pounds $112-$121.50 per cwt and 800-1,000 pounds $103.85-$114.75 per cwt.

The cash fed live cattle weighted average price for the week through Thursday at $94.20 per cwt was up $2.80 per cwt from a week earlier. The weighted average carcass negotiated price through Thursday was up $3.55 per cwt from seven days earlier at $148 per cwt.

Wholesale beef prices showed Choice beef Friday morning at $146.64 per cwt, up $1.82 per cwt from a week earlier. Select beef prices were up $1.70 per cwt compared to seven days earlier at $137.88 per cwt.

Fed cattle prices are expected to push higher as we go through fall, but wholesale beef prices will need to strengthen more to support higher prices. There are reports that casual dining restaurants' traffic has backed off. Restaurant demand for beef is a very important part of the equation.

Slaughter this week under the Federal Inspection was estimated at 654 thousand head, up 2.8 percent from a year earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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