Cash fed cattle prices fell hard this week as the 5-Area fed price shed $3.81/cwt compared to last week. Most cash trade took place early in the week as feeders likely pulled show list in the face of the the lower price level. Live sales in the Southern Plains were called at $122/cwt on Tuesday. On Wednesday in Nebraska, live sales were at $121-$123/cwt and dressed trade was at $193-$194/cwt. In Oklahoma City, feeder steers and heifers were $4-$8/cwt lower. Steer calves in OKC were steady to $2/cwt lower and heifer calves were $10-$15/cwt lower. Feeder steers sold steady and heifers were $1-$3/cwt lower in Mississippi markets, while slaughter cows were $1-$2/cwt lower and bulls were steady.
Live and feeder cattle futures were lower again this holiday shortened week. Beef demand remains an big uncertainty as higher fuel prices, negative media coverage, and a strengthening U.S. dollar weighed on prices. Thursday’s drop in unemployment claims helped but Friday’s release of lower than expected jobs added will likely be offsetting when markets open Monday.
Follow through as a result of last week’s Grain Stocks reports continued to give a spark to old crop corn contracts. Strong export data later in the week added to the positive news.
Wholesale beef prices continue to move lower. Both Choice and Select dipped below $180/cwt mid-week. Choice managed to average just above this level for the week at $180.79/cwt, down $3.86. Select average $178.72/cwt, down $5.63. The spread between Choice and Select dipped into negative territory on Wednesday of last week (i.e., Select sold at a premium to Choice); however the spread widened a bit this week to $2.07/cwt versus $0.30 last week (weekly average spreads). The unfavorable media attention that has been given to Lean, Finely Textured Beef seems to really be having an impact on 50% lean ground beef (the majority of ground beef from steers and heifers, thus the majority of most ground beef). Since the first week of March, 50% ground beef prices have slipped 17.6% compare to about 0.5% for 90% lean product. Clearly, the recent loss of demand for the 50% ground beef over this time has pushed these prices lower which has forced carcass prices to drop as well.