May 17 -- The cash live cattle trade Friday morning was light to moderate. USDA’s mandatory price reporting (MPR) service reported that Nebraska sold 7,267 head at $201.31/cwt. dressed, or $125.32 live for a weekly total of 12,814 head.

Iowa-southern Minnesota sold 6,493 head at $201.10 dressed or $125.36 live for a weekly total of 26,808 head. Kansas sold 2,746 head at $125 live or $196.81 dressed for a weekly total of 5,473 head. Texas sold 1,213 head at $125 live for a weekly total of 10,696 head. The MPR weekly totals include negotiated cash and grid sales.

Live cattle futures closed lower. June closed down 50 points at $119.40/cwt. (vs. $120.45 last Friday), August closed down 117 points at $118.55, October closed down 90 points at $121.97, December closed down 75 points at $123.52, February closed down 85 points at $124.80, and April closed down 30 points at $126.65.

The week’s cattle slaughter was an estimated 652,000 head (vs. 644,203 head last year), with Friday’s kill 125,000 head and Saturday’s kill 31,000 head. This was the highest weekly slaughter total since the week ended Aug. 25 last year. Year-to-date FI slaughter is an estimated 11.994M head, down 1.8% or 224,000 head from 2012’s 12.218M head. Hog slaughter year to date is down 0.5% on last year.

Boxed-beef cutout values were weak on Select and firm on Choice on light to moderate demand and light offerings. The Choice cutout increased $0.74/cwt. from the day before to a new daily record of $209.51/cwt. (vs. $204.98 last Friday), while the Select cutout declined $0.40 to $192.31. The Choice-Select price spread was $17.20/cwt. (vs. $13.78 last Friday). The reported spot boxed-beef trade for the week was 506 loads of fabricated cuts, 16.1% lower than the 603 loads the week before.

Packer margins for the week were positive by $54.19/head, compared to a positive $5.61 the week before, according to HedgersEdge.com.

Projected Cattle Feeding Margin

The projected cattle feeding margin (cattle placed on feed May 17, with an expected finish date of Oct. 11) is a positive $37/head, according to the North American Institute for Beef Economic Research (NAIBER). This compared with a positive $31/head the week before. The lower and upper profit potential is a negative $171/head to a positive $247/head, vs. a negative $172/head to a positive $235/head last week.

Cattle on Feed Report

USDA released its monthly Cattle on Feed (COF) report Friday afternoon. The numbers for U.S. feedlots 1000 head or larger were:

• COF 1 May 1: 10.735M head, 96.6% of a year ago

• Placed in April: 1.750M head, 115.1%

• Marketed in April: 1.855M head, 102.2%

Analysts regarded the report as neutral to slightly bearish. April placements were 3.0% higher than the average of analysts’ forecasts and the two heaviest weight categories saw a large year-on-year increase. Overall placements were 229,000 head above last year but the 2012 total was the smallest since 2002 and 100,000 head below the five-year average.

April marketings were 0.7% lower than the average forecast. One extra slaughter day in April meant marketings were about 2.3% lower than a year earlier. The larger placements and smaller marketings meant the May 1 COF total was 0.3% larger than forecast.

Only California (up 3%) of the 11 featured states had more cattle on feed than a year earlier. Arizona’s and Oklahoma’s were the same as last year. Texas’s COF total was down 6% on last year while Kansas’s was down 1%, Nebraska’s was down 3%, Colorado’s was down 7% and Iowa’s was down 5%. Texas still had the largest number of cattle on feed, followed by Nebraska and Kansas.

Only South Dakota and Washington placed fewer cattle in April than a year earlier. Texas placed 6% or 25,000 more cattle, Nebraska placed 22% or 80,000 more cattle and Kansas placed 17% or 50,000 more cattle. Colorado placed 17% more cattle, Iowa placed 62% more cattle and California placed 44% more cattle.

The placement weight breakdown revealed year-on-year increases in all four categories. The under-600-lb. category saw 25,000 or 5.6% more cattle placed. The 600-699-lb. category saw 20,000 or 8.0% more cattle placed. The 700-799-lb. category saw 75,000 or 19.7% more cattle placed, while the 800-lb.-plus category saw 114,000 or 21.3% more cattle placed. Texas (up 1%), Nebraska (up 12%), Iowa (up 35%), Washington (up 3%), and Arizona (up 4%) marketed more cattle in April than last year. Kansas marketed 4% fewer cattle.

See the entire report in pdf form here, and the text version here.

Have a good week.

Steve Kay