Grimes and Plain Weekly Cattle Outlook

CHICAGO - Oct 5/07 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

When the dust finally settled the live weighted average fed cattle price last week for the five markets was at $95.50 per cwt, up about $1.30 per cwt from the average of the five markets through Thursday. The carcass weighted average price was up $1.50 per cwt from Thursday and up about $3.40 per cwt from a week earlier.

Even with tight fed cattle supplies, the run-up in prices is being slowed by wholesale beef prices. Beef prices for the week showed Choice beef Friday morning at $145.73 per cwt, down $0.91 from a week earlier, with packers looking at tight margins. The select wholesale beef price on Friday morning was down $2.06 per cwt at $135.82 per cwt compared to a week earlier.

Cow slaughter for the year through the week ending September 15 was up 7.6 percent from last year. However, slaughter for the four-week period ending September 15 was down about 1.5 percent from a year earlier. But, slaughter for this four-week period is still nearly 21 percent above two years earlier. Slaughter in the fall of 2006 for this period was quite large due to dry weather in a substantial part of beef-cow country. We do not believe we are building the breeding herd very much, if any, at the current time.

The male-female slaughter ratio for August 2007 was down from a ratio of 1.287 males per female in August 2006 to 1.22 this year. This compares with a ten-year average of 1.17. The ratio of male to female slaughter supports a breakeven to slight reduction in the cow herd.

Feeder steers and steer calves at Oklahoma City this week were steady to $1.00 per cwt higher than a week earlier. The advance was on six-weights suitable for the feedlot. Feeder heifers were lightly tested but steady. Heifer calves were steady to $3.00 per cwt lower than seven days earlier.

The prices for medium and large frame Number one steers by weight groups were: 450-500 pounds $124-$132 per cwt, 500-600 pounds $116-$128 per cwt, 600-700-pound calves $108-$121 per cwt, 700-750-pound calves $106-$112 per cwt, 600-700-pound yearlings $119-126 per cwt, 700-800 pounds $112-$121.25 and 800-1,000 pounds $104-113.75 per cwt.

Dressed weights of steers and heifers were near a year earlier in August. Average steer weights this August were the same as a year earlier at 845 pounds. Heifer weights this August at 766 pounds were one pound per head lighter than in August of 2006. Weights at a year earlier are a bit of a surprise with current corn prices.

The live fed cattle weighted average price through Thursday for the five-market area at $90.75 per cwt was down $3.45 per cwt from a week earlier. The weighted average carcass price for the five-market area was down $3.80 at $144.20 per cwt from seven days earlier.

Slaughter this week under Federal Inspection was estimated at 672 thousand head, up 5.8 percent 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.