By Joanna Levin
CATTLE prices have been driven sharply lower by a corn rally, which has raised the cost of feed. The Chicago August feeder (store) cattle contract dropped nearly 3¢ last week, from 75¢/lb on Monday 15 June to a new contract low of 72.2¢/lb on the Friday. However, a drop in corn on 22 June helped cattle inch up to close at 72.95¢/lb.
The latest US Department of Agriculture (USDA) report on feedlot activity is mildly bearish. The number of cattle placed in feedlots with a capacity of over 1000 head jumped 8% during May, from year-earlier figures to 1.94 million head. At the same time, the number of cattle marketed from the feedlots to the packing houses fell 5% from May 1997 to 1.95m head.
Overall, the number of feeder cattle climbed by 1% compared with a year earlier and by 13% compared with two years ago.
Owners will have to sell cattle for slaughter aggressively over the next few months. The high level of feedlot placements during May will translate into ample supply of live cattle for the packers this autumn. This is helping to keep down prices: packers are bidding 62-63¢/lb for fed cattle, while owners are offering at 64-65¢/lb, little changed from last week.