Cattle Market Notes – Week of May 11, 2012


Cash Cattle:

Cash fed cattle were slow to move this week and so no trends were called.  The five-area cash price finished the week at $120.88, mostly steady with last week’s price of $120.16.  In Oklahoma City, both feeders and calves were called $1-$3/cwt higher for all classes.  In Mississippi marktes, feeder steers were $2-$10/cwt higher and feeder heifers were $2-$5/cwt higher.  Slaughter cows were $1-$3/cwt higher and bulls were steady in Mississippi.

Futures:

Live cattle futures were down slightly on the week with nearby contracts ending close to last week’s close and more distant month’s were down a bit more.  Prices seemed to be on a roller-coaster moving up one day and down the next.  Losses were greatest on Friday as wholesale beef moved lower and news of JP Morgan’s $2 billion losses were digested.

Corn futures were lower on the week as the market was rocked on Thursday following USDA’s supply/demand report.  One day earlier, on Wednesday, markets dropped on pre-report positioning and demand concerns.  Then on Thursday USDA revealed more corn carry-over from 2011 to this year than expected – 851 million bushels versus 758 expected – as well as more projected corn carry-over for the upcoming marketing year (more detail on the report is here).

Beef:

Wholesale beef prices were lower.  Choice prices were only down $0.29/cwt at $190.37, but took a sharp dip on Thursday after topping out at $191.51/cwt on Wednesday.  Select was down a bit more at $184.71/cwt, down $1.66.

Beef Supply and Demand Recap:

Beef production was projected higher compared to last month’s estimates from USDA, 25.19 billion pounds versus 25.04 in April, based on increased dressed weights and a higher pace of cow slaughter.  Production estimates for 2013 were revealed for the first time in this month and showed a decline from 2012 production by almost 500 million pounds at 24.565.  Per capita consumption of beef was revised slightly higher to 55.8 pounds/person compared to 55.4 in April due to the larger 2012 production and lighter consumption projections.  Per capita consumption is expected to be lower in 2013, 54.5 pounds/person, largely due to the limited supplies.

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