Grimes and Plain Weekly Cattle Outlook

CHICAGO - Apr 4/08 - SNS -- Following is a week ending cattle market comment from the University of Missouri - Columbia's Glenn Grimes and Ron Plain.

Cash fed cattle prices maintained the full decline in prices when the

bulk of the trade occurred last Friday. The weighted average for the

full week for live cattle for the five-market area was $87.92 per cwt.

The weighted average carcass price for the five-market area was

$140.60 per cwt.

The spread between Choice and Select beef continued quite narrow

indicating market current has slipped. Friday morning the spread

between Choice and Select beef was only $0.62 per cwt.

Demand for beef at the consumer level declined at the end of 2007 and

beginning of 2008. For November through January the demand for beef at

the consumer level was up 0.5 percent. For December through February,

consumer demand for beef had slipped to a minus 2.8 percent. The index

can and does change substantially within a three-month time frame for

the calculation.

Live fed cattle demand also slipped for December-February compared to

November-January. The earlier period fed cattle demand was at a plus

3.5 percent but declined to plus 1.8 percent for the December-February

three-month period compare to a year earlier.

The futures market for live cattle continues to point to fed cattle

prices about $100 per cwt for the end of 2008 and early 2009. Cattle

producers did not get good news on March 31 as to acres of corn

planned to be planted in 2008. The estimate is for 86 million acres,

down 7.6 million acres from 2007. However, the 86 million acres is the

second largest average planted to corn since 1949.

The bottom live is, very high corn prices compared to history for the

foreseeable future indicate the cattle industry will need to be

downsized.

Feeder steer prices at Oklahoma City this week were steady to $2 per

cwt lower after a $2-5 per cwt lower start; 650-700 pound steers

stayed at the full decline through the day. Feeder heifers were $2-5

per cwt lower and stocker cattle and calves steady to $3 per cwt

lower.

The prices by weight groups for medium and large frame Number One

steers were: 400-500 pounds $120.50-137 per cwt, 500-600 pounds

$114-128 per cwt, 600-700 pounds $96-106.25, 700-800 pounds $97-106

per cwt and 800-1000 pounds $84.75- 98.25 per cwt.

Choice wholesale beef prices Friday morning at $137.13 per cwt down

$1.20 per cwt, Select beef at $136.51 per cwt down $1.79 per cwt from

a week earlier.

Cash live fed cattle prices for the five-market area through Thursday

at $85.85 per cwt down $2.12 per cwt from a week earlier. Cattle sold

in carcass weighted average for the five-market area at $138.25 per

cwt down $2.50 per cwt from seven days earlier.

Cattle slaughter this week under Federal Inspection estimated at 624

thousand head, up 3.8 percent from a year earlier.

Issued by Glenn Grimes and Ron Plain

University of Missouri - Columbia

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