Cash fed cattle moved higher again this week. Trade movement was low enough that no trends were called this week for individual states, but the five-area, regional, price was higher by$1.58/cwt at $119.16/cwt. In Oklahoma City, feeder steers over 800 pounds were $2-$4/cwt lower, while feeders under 800 pounds were steady to $2/cwt lower. Feeder heifers in OKC were $2-$3/cwt lower. Mississippi feeders steers sold $3-$5/cwt higher and heifers were $2-$5/cwt higher. Cull cows were $1-$6/cwt higher and bulls in Mississippi were called at $1-$6/cwt higher.
Live cattle futures moved moderately higher this week. Prices caught steam Wednesday and Thursday as cash boxed beef prices improved. Prices cooled on Friday as corn surged early and cash trade failed to fully materialize. Feeder cattle contracts through the remainder of 2012 increased slightly while winter and spring 2013 contracts fell slightly.
Corn futures ended the week mostly even with last week, but surpassed the recently set record price on Friday morning. USDA released it’s monthly supply and demand estimates on Friday morning. The report revealed a smaller estimated corn crop. Yield is currently projected 123.4 bu/ac compared to 146.0 projected last month and 126.2 expected by pre-report analyst. After factoring in a projected decrease in the number of acres that will be harvested (from 88.9 million to 87.4) this would put production at 10.779 billion bushels. The production estimate was 192 million lower than the pre-report expectations of 10.971 billion bushels (the pre-report yield and production expectations resulted in an implied harvested acreage number of 86.9 million). The lower supply will cause some rationing by end users. This is reflected by USDA in that projected corn used for feed was lowered to 4.075 billion bushels, down 725 million, projected corn used for ethanol was lowered 400 million bushels to 4.5 billion, and corn exports were lowered to a projected 1.3 billion bushels, down 300 million. Collectively USDA projects corn ending stocks at 650 million bushels, a 45% decline from last month’s expectations but in-line with the average pre-report estimate of 651. The smaller yield and production number had traders nervous in the early trading and corn surged to $8.48 3/4 per bushel. After the knee-jerk reaction, prices cooled as all USDA values were in the ballpark of what had already been priced into the market, especially the ending stock number.
Boxed beef prices moved higher this week after last week’s leveling off which curtailed seven weeks of negative trading. Granted, prices typically move lower through the summer and usually start to increase at this time of year. Still, the sharp decline experienced this year felt harsh and the recent uptick is welcomed. Choice wholesale beef finished with a weekly average of $181.46/cwt, up $3,57. Select ended the week up $4.05/cwt at $175.19.