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Weekly Market Summary
For the week ending February 16, 2018
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For the week... All market indicators were higher, and with the time of the year approaching when cutout prices rally, the intermediate term looks bullish. This bullishness is reinforced by a manageable supply of fed cattle in the pipeline combined with supplies of the Choice boxed beef cutout that will remain light over the next month when increased demand normally offsets increasing supplies.
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10 Day Market Trendline
Change from Previous Day: +0.76%
  Change from 10 Days Ago: +1.98%
  Change from 60 Days Ago: +8.21%
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60 Day Market Trendline
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The Trendlines are indicators of overall cattle/beef market strength and are based on daily market factors.  Each daily factor is the aggregate weighted total of the Gain/(Loss) for 12 market indicators compared to the previous trading day. 
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  • Click Here..to receive the WMS on Saturday mornings or have it sent to friends & associates.
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  • View previous Summaries in the..WMS Archives
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  • For daily market news, check Cattle Industry News or Market Reports
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    Regular Contents: 
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  • Weekly Market Overview.
  • National Feeder & Stocker Cattle Weekly Summary.
  • Stocker & Feeder Steers.
  • Stocker & Feeder Cattle Weekly Receipts.
  • 5 Year Moving Avg. - Stocker, Feeder, & Slaughter Steers.
  • Mexican Feeder Cattle Weekly Import Summary.
  • Selected Auction Reports.
  • Direct Sales of Feeder & Stocker Cattle.
  • Representative Sales of Cow & Pairs.
  • Canadian Cattle.
  • USDA National Retail Beef Report.
  • Photo of the Week.
  • "Shootin' the Bull" Weekly Analysis.
  • U.S. Dollar - 6 Month Chart.
  • Choice Boxed Beef Cutout, Slaughter, & Feeder Steers.
  • Feeder Steers/Corn Correlation.
  • Slaughter Cows & Bulls.
  • Est. Weekly Meat Production Under Federal Inspection.
  • Weekly Hay Reports.
  • Weekly Feedstuffs Market Review.
  • Bullish/Bearish Consensus: Cattle & Corn.
  • Stock Markets & Economic News.
  • Weather Outlook.
  • Feedyard Closeouts: Profit/(Loss).
  • Slaughter Cattle.
  • National Grain Summary.
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    Of Possible Interest:  The views expressed in the content below are included in the WMS because we found them to be of interest but do not necessarily reflect the views of The Cattle Range.
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    Weekly Market Overview:
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    On-Line Store
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    National Feeder & Stocker Cattle Weekly Summary:
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    RECEIPTS:  Auctions   Direct  Video/Internet   Total
    This Week      238,000      62,900        2,200        303,100 
    Last Week      224,300      57,700        26,500      308,500 
    Last Year        257,000      35,200        26,000      318,200

    Compared to last week, steers and heifers sold steady to 5.00 higher. Buyers continue to pay up for cattle suitable for summer grazing as they anticipate the supply of those calves get more difficult to find the farther in the new year they  get. Demand was quoted as good to very good at most auctions this week as long strings and high quality cattle were on consignments sheets. Last Friday in Fort Pierre, SD a load of 701 lb steers with all the bells and whistles sold at 180.00 and six loads of replacement quality heifers weighing from 772 to 792 lbs sold from 154.00 to 158.50 for a weighted average of 156.69. On Monday at Tri-State Livestock Auction in McCook, NE a string of six loads of 908 lb steers sold at 147.00. Buyers are betting on the come as the drought picture in many states continues to intensify. Even though rainfall totaled from 2 to 6 inches from eastern Texas to Tennessee, the west Texas area is listed in extreme drought conditions again as Amarillo has now passed the 4 month mark of not receiving any measurable amount of precipitation. 

    Nebraska seems to be in pretty good shape moisture wise as some market reports out there have made reference to some 'tag' evident on consignments at auctions. Colors other than white touch every county in Kansas and Missouri on the drought monitor map. The CME Cattle complex regained the losses from last week as the front five months of Live contracts were 2.62 to 4.15 higher when compared to last Friday. Likewise for the Feeder Cattle contracts as gains of 3.13 to 4.80 were reported for the week. Feedlot trade was sluggish to develop last week as most sales occurred after reporting agencies closed up shop. However, today packers did not want to take a chance of feedyards not selling as analysts were guessing that their inventory numbers were probably getting a little short with the last couple weeks of February upon them. 

    On Wednesday the Tama Livestock Auction in IA, top sales of steers and heifers sold above 132.00; making ranchers wonder if the packers are going to chase the feedlot trade or try to keep the price advance to a minimum.  Right around the time the CME closed for the week, packers blinked and paid up. Compared to last week, negotiated live sales of slaughter steers and heifers sold 4.00 higher at 130.00 while dressed sales were 5.00 higher at 205.00. Breaking through the 130.00 barrier is a big psychological gain as that price level is the highest since the middle of June 2017. Auction volume this week included 66 percent weighing over 600 lbs and 42 percent heifers.

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    Stocker Steers:
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    Feeder Steers:
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    Stocker & Feeder Cattle Weekly Receipts:
    Weekly sales of Stocker Calves & Feeder Cattle sold via auctions, direct country sales, and video/Internet sales as reported by the UDSA Market News
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    Five Year Moving Average - Stocker, Feeder, & Slaughter Steers:
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    Cattle Futures Summary: Live cattle futures settled the day with slight to 82.5 cent gains in most contracts. Feeder cattle futures were mixed, with nearby March 10 cents lower. Feb live cattle were up 2.83% since last week, with March feeders 2.41% higher. The CME feeder cattle index was up 45 cents on February 15 at $148.15. Wholesale boxed beef values were mixed on Friday afternoon. Choice boxes were up 84 cents at $209.88, with Select boxes 2 cents lower at $205.12. Estimated weekly FI cattle slaughter is 596,000 head through Saturday. That is up 5,000 from the previous week and 20,000 head more than the same week last year. Cash trade was shown at $130 across most regions on Friday, with dressed trade at $205 in the north.
     
  • Commitment of Traders - Live Cattle Futures.
  • Commitment of Traders - Feeder Cattle Futures.
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    Mexican Feeder Cattle Weekly Import Summary
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    Receipts EST: 18,000    Week ago Act: 16,609    Year ago Act: 23,258 

    Compared to last week, steer calves and yearlings mostly steady. Heifers steady. Trade moderate to active, demand moderate to good. Supply consisted of steers and spayed heifers weighing 300-600 lbs. 

    Feeder steers: Medium and large 1&2, 300-400 lbs 187.00-200.00; 400-500 lbs 167.00-180.00; 500-600 lbs 147.00-160.00; Medium and large 2&3, 300-400 lbs 177.00-190.00; 400-500 lbs 153.00-170.00; 500-600 lbs 137.00-150.00.

    Feeder heifers: Medium and large 1&2, 300-400 lbs 157.00-170.00; 400-500 lbs 147.00-160.00; 500-600 lbs 137.00-150.00.

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    Selected Auction Reports:
    "Click" on individual.auction links.for complete report
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    Tulia Livestock Auction - Tulia TX
    Receipts:  3207    Last Week:  3050    Year Ago:  594
    Compared to last week:  Feeder steers and heifers sold 1.00 to 4.00 higher.  Trade was active on very good demand.  Record setting drought continues to push lighter weight yearlings into the market early this year.

    Pratt Livestock Feeder Cattle Auction - Pratt, KS
    Receipts:  4434               Last Week:  3588              Year Ago:  3286
    Compared to last week: Feeder steers 600-1000 lbs firm to 3.00 higher with instances of 6.00-8.00 higher. Feeder heifers 600-700 lbs and 750-900 lbs firm to 3.00 higher; 700-750 lbs 2.00 lower.

    Farmers & Ranchers Livestock Commission Co. - Salina KS
    Receipts:  3852    Last Week:  3229    Year Ago:  4440
    Compared to last week: Steers 600-1000 lbs steady to 5.00 higher; 600 lbs and under higher undertone noted. Heifers 650-1050 lbs 1.00-3.00 higher; 650 lbs and under higher undertone noted.

    Huss Platte Valley Auction - Kearney NE
    Receipts:  4924    Last Week:  3652    Year Ago:  5222
    Compared to last week, 650-800 lbs steers sold 6.00 to 8.00 higher; over 800 lbs sold 2.00 to 6.00 lower. On the heifers, 600-750 lbs sold 3.00 to 4.00 lower; over 750 lbs sold steady.

    Valentine Livestock Auction Market - Valentine NE
    Receipts:  5410  Last week: 675 Last year: 5320 
    Compared with two weeks ago steers and heifers traded unevenly steady.  Demand was good with sevveral buyers.  Light snow and freezing rain in the area.  Feeders made up 100 percent of the offering.

    Denison Wtd Avg Feeder Cattle Auction - Denison IA
    Receipts:  2542    Last Week:  2413    Year Ago:  2415
    Western Iowa Preconditioned Feeder Calf Sale - compared to last week a lower undertone was noted on all cattle.  Trade was moderate to good with a higher offering today.  Receipts included 60 percent steers and 40 percent heifers.

    El Reno Cattle Narrative - El Reno OK
    Receipts           Week Ago             Year Ago
    12,466                11,772                 6,336
    *** Final report *** Compared to last week:  Feeder steers under 850 lbs sol steady to 3.00 higher, over 850 1.00-2.00 lower.  Feeder heifers traded 1.00-3.00 higher.  Steer calves sold 3.00-6.00 higher.  Heifer calves traded 4.00-
     8.00 higher.

    Mitchell Livestock Wtd Avg Report - Mitchell SD
    Receipts:  6251    Last Week:  5590    Year Ago:  4963
    Compared to last week:  Feeder steers over 650 lbs and all weights of feeder heifers steady to 4.00 higher, except instances of 8.00 to 10.00 higher on steers 650-700 lbs.  Steers under 650 lbs too lightly tested last week for comparion.

    Cattleman's Livestock Auction - Dalhart, TX
    Cattle and Calves: 2,625      Last Week: 2,349      Last Year:  1,358 
    Compared to last week:  Steer and heifer calves under 600 lbs firm to 2.00 higher.  Feeder steers and heifers over 600 lbs 2.00-3.00 higher. Quality of receipts on offer was mostly attractive with a few plain. Slaughter cows 2.00-3.00 higher.

    Joplin Regional Stockyards Feeder Cattle Wtd Avg - Carthage MO
     Receipts           Week Ago              Year Ago
       2,899                4,467                      6,257
    ***CLOSE***   Compared to last week, steers and heifers under 500 lbs 1.00 to 5.00 higher, over 500 lbs steady. Sale started later than usual due to the recent ice storm.  Demand good, supply light.

    Sioux Falls Regional Livestock wtd Avg Report - Worthing SD
    Receipts:  5073    Last Week:  5281    Year Ago:  5239
    Compared to last week:  Feeder steers under 800 lbs 3.00 to 4.00 higher, over 800 lbs steady to 3.00 lower.  Feeder heifers under 550 lbs unevenly steady, over 550 lbs 3.00 to 5.00 lower.  Good to very good demand for all weights and classes with the best demand centered on steers under 750 lbs.

    Winter Livestock - La Junta CO...
    Receipts:  2218    Last Week:  2194    Year Ago:  2150
    Compared with last Tuesday: Steers under 600 lbs steady to 2.00 lower except for 500 to 550 lbs 3.00 higher, 600 to 700 lbs 2.00 lower. Heifers under 700 lbs steady to 3.00 higher.

    Russell Wtd Avg Feeder Cattle Auction - Russell IA
    Receipts:  2726    Last Week:  2671    Year Ago:  4746
    Compared to the sale last week: Feeder strs under 550 lbs. mostly 5.00-8.00 lower, feeder strs over 550 lbs. mostly 2.00-4.00 higher and feeder hfrs mostly 2.00-4.00 higher.

    Oklahoma National Stockyards - Oklahoma City, OK
    Receipts           Week Ago             Year Ago
      6,097                 9,442                    8,286
    **Add Close Updating with Actual Receipts *** Compared to last week:  Feeder steers steady to 2.00 higher.  Feeder heifers mostly steady to 4.00 higher, advance on 6 weights.  Steer and heifer calves steady to 3.00 higher.  Quality average to attractive, few plain.

    Cullman Stockyard - Cullman AL
    Receipts:  549    Last Week:  356    Year Ago:  884
    Compared to last week: Slaughter cows and bulls steady. Feeder bulls and steers sold 2.00 to 3.00 higher. Feeder heifers sold steady to 2.00 higher. Replacement cows and pairs 50.00 to 100.00 higher per head.

    Toppenish, WA Livestock Auction - Toppenish WA
    Receipts:  2020    Last Week:  2000    Year Ago:  2100
    Compared to last Thursday at the same market, stocker and feeder cattle unevenly steady to 14.00 higher. Trade very active with very good demand for all classes. The best demand seen this week was for lightweight grass cattle or for heavyweight cattle which buyers hope to finish against the June live contract.

    Blue Grass South Livestock Market - Stanford KY
    Receipts:  370    Last Week:  122    Year Ago:  625
    Compared to last Monday:Feeder steers and heifers 2.00-4.00 higher on limited comparison.Good demand for feeder classes.Slaughter cows and bulls 2.00-4.00 higher,Good demand for slaughter classes.

    Tri-State Livestock Auction Market - McCook NE
    Receipts:  2810    Last Week:  2650    Year Ago:  2200
    Compared to last week, steers were steady - 4.00 lower and heifers were steady - 3.00 higher. Demand was good on all offered. Steers accounted for 58 percent and heifers 42 percent of the offering. Weights over 600 lbs 77 percent of the offering, rest weigh cows and bulls.

    Clovis Livestock Auction - Clovis NM
    Receipts:  2559       Last Week:  3206        Year Ago:  1701
    Compared to last week:  Feeder steers under 600 lbs 9.00-12.00 higher; over 600 lbs steady to 1.00 higher except 600-700 lbs 4.00 higher.  Heifers under 600 lbs 3.00-7.00 higher, instances 10.00 higher on 300-400 lbs; over 600 lbs mostly steady.  Slaughter cows 5.00-6.00 higher, bulls 3.00 higher. 

    Green Forest Livestock Auction - Green Forest AR
    Receipts:  561    Last Week:  594    Year Ago:  482
    Compared to one week earlier, slaughter cows steady to 2.00 higher, slaughter bulls mostly steady, feeder steers and heifers lightly tested, feeder bulls 3.00 to 5.00 higher, steer calves lightly tested bull calves 10.00 to 12.00 higher,

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    Direct Sales of Feeder & Stocker Cattle:
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    WY, Western NE & Western Dakotas Direct Feeder Cattle Wtd Avg (Fri)
    Receipts: 844    Week Ago: 510     Year Ago: 945 
    Not enough comparable cattle this week for an adequate market trend. Demand was mostly moderate as several feed yards have limited available receiving pens. Most of Nebraska feed yards are experiencing a spring like thaw as temperatures are expected to climb in the 50's late in the week.

    AZ-CA-NV Weekly Feeder Cattle Review (Fri)
    Confirmed 0
    Compared to last week,  Trade inactive, demand light.  Trade should resume late next week.  Cattle weighing over 600 lbs totaled 0 percent. Heifers totaled 0 percent.

    IA-South MN Direct Feeder Cattle Weekly (Mon)
    Receipts:  0    Last week: 118     Last Year:  0
    Compared to the last report:  Feeder steers and heifers not  tested.  Prices based on net weights FOB after a 3 percent shrink or equivalent and 5-10 cent slide on calves and 4-6 cent slide on  yearlings from base weights.

    Eastern Cornbelt Direct Feeder Cattle Summary (Fri)
    This week: 1,750      Last week: 3,247      Last Year: 0
    Compared to last week:  Not enough comparable current FOB delivered cattle last week for an accurate market trend.  Supply included 100 percent over 600 lbs; 75 percent heifers.

    Colorado Direct Feeder Cattle Report (Fri)
    Receipts: 1,902        Last Week 3,014        Last Year 2,007 
    Compared to last week:  Feeder steers and heifers sold with a 1.00-2.00 lower on limited offerings.  Demand remains moderate. Supply consisted of 100 percent over 600 lbs; 51 percent heifers.

    Kansas Direct Feeder Cattle Summary (Fri)
    Receipts:  1,500        Last Week: 3,791         Last Year:  3,068
    Compared with last week: Feeder steers and heifers lightly tested this week.  Feeder demand moderate.  Weather continues to be very dry in much of the wheat country.  Volume includes 100 percent 600 lbs and over.

    Montana Direct Feeder Cattle Wtd Avg (Fri)
    Receipts: 330          Last Week 128          Last Year: 0 
    Compared to last week:  No trades last week so no trend available. Supply includes 100 percent over 600 lbs and 100 percent heifers. Unless otherwise stated prices are FOB weigh point with a 2-3 percent shrink or equivalent and with a 8-12 cent slide on calves and 4-8 cent slide on yearlings from base weights

    New Mexico Feeder Cattle Report (Mon)
    Receipts:  2500    Last Week:  2900    Year Ago:  3100
    Compared to last week:  Current FOB sales of steers and heifers sold steady to firm on limited comparable sales.  Trade was moderately active on fairly good demand.  Supply consisted of 85 percent steers and 15 percent heifers.

    Northwest Wtd Avg Direct Feeder Cattle Report (Fri)
    Receipts:  390    Last Week:  155    Year Ago:  1,650
    Compared to last week:  Feeder steers and heifers not well tested but a higher undertone was noted.  Demand good.  The feeder supply included 100 percent over 600 lbs and 19 percent heifers.

    Oklahoma Direct Feeder Cattle (Fri)
    Receipts: 9,848        Last Week 2,098        Last Year 3,915 
    Compared to last week:  Feeder steers and heifers lightly tested last week on a Current FOB Basis, however a weak undertone was noted. Receipts this week consisted of 100 percent over 600 lbs and 60 percent heifers.

    Texas Direct Feeder Cattle (Fri)
    Receipts:  36,700    Last Week:  35,100    Year Ago:  20,500
    Compared to last week: Current FOB sales of steers and heifers sold mostly steady to 2.00 lower; except steers weighing over 800 lbs sold steady to firm.  Trade was active on good demand.  Volume increased for out front sales as future months on the CME gained momentum.
     

  • Extensive U.S. & Canadian Auction Results are available on The Cattle Range
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    Representative Sales of Cows & Pairs:
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    Reported by.USDA Market News for the week ending February 16th
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    • McAlester, OK:
      • Replacement Cows:  Medium and Large 1-2  1-6 yr old 925-1500 lb cow 4-8 months bred 1000.00-1450.00; 5-10 yr old 1025-1375 lb cow 4-8 months bred 910.00-1260.00 per head. 
      • Pairs:  Medium and Large 1-2  1-4 yr old 1000-1025 lb cow w/100-150 lb calf 1125.00-1450.00; 5-10 yr old 800-1200 lb cow w/125-225 lb calf 910.00-1025.00 per pair. 
    • Oklahoma City, OK:
      • Replacement Cows:  Medium and Large 1-2  3-4 yr old 975-1225 lb cow 5-7 months bred 1050.00-1350.00; 5-10 yr old 1025-1475 lb cow 4-7 months bred 885.00-1135.00 per head. 
      • Pairs:  Medium and Large 1-2  4-9 yr old 900-1200 lb cow w/50-100 lb calf 1075.00-1085.00; 5-8 yr old 1175-1500 lb cow, some black, w/50-125 lb calf 1200.00-1360.00 per pair. 
    • Clovis, NM:
      • Replacement Cows: Medium and Large 1-2: Young to long solid mouth 850-1420 lb cows 3-8 months bred, 725.00-1175.00, per head; middle aged short solid mouth 850-1300 lb cows 3-8 months bred 510.00-810.00, per head; aged 935-1285 lb cows 3-8 months bred 420.00-700.00, per head.  First Calf Heifers:  800-905 lb cows 3-8 months bred 690.00-900.00, per head. 
      • Cow/Calf Pairs:  Medium and Large 1-2:  Middle aged pkg 925 lb cows w/125-150 lb calves 1000.00, per pair; aged indiv 750 lb cow w/125 lb calf 800.00, per pair. 
    • Roswell, NM:
      • Replacement Cows:  Medium and Large 1-2 Young 845-1270 lb cows 3-8 months bred 700.00-1275.00, per head; middle aged 820-1285 lb cows 3-8 months bred 650.00-950.00, per head; aged 835-1302 lb cows 3-8 months bred 500.00-785.00, per head.  First Calf Heifers: 630-880 lb cows 3-6 months bred 650.00-775.00, per head. 
      • Cow/Calf Pairs:  Medium and Large 1-2 Young 750-975 lb cows w/150-300 lb calves 750.00-1060.00, per pair; middle aged 975-1330 lb cows w/100-225 lb calves 1025.00-1250.00, per pair. 
    • Joplin, MO:
      • Bred Cows:  Medium and Large 1  4-6 yrs 3rd stage 1100-1365 lbs 1600.00-1700.00; short and solid mouth 3rd stage pkg. 1355 lbs 1110.00. Medium and Large 1-2  2-7 yrs 2nd and 3rd stage 1050-1350 lbs 1075.00-1400.00, 1st stage 1070-1295 lbs 950.00-1010.00; short and solid mouth to aged 2nd and 3rd stage 1100-1365 lbs 750.00-1000.00. Large 1-2  5-6 yrs 3rd stage couple 1540-1770 lbs 1060.00-1115.00; 7 yrs to aged 3rd stage 1390-1775 lbs 900.00-1175.00. Medium and Large 2  4 yr 1st stage 950 lb indiv. 925.00. Medium 1-2  2-6 yrs 2nd and 3rd stage 850-1050 lbs 825.00-1050.00, 1st stage 890-1050 lbs 725.00-800.00; short and solid mouth to aged 2nd and 3rd stage couple 875-890 lbs 450.00-515.00 per head. 
      • Cow/Calf Pairs:  Medium Large 1-2  4-6 yrs 1220-1350 lb cows w/babies to 145 lb calves 1175.00-1450.00; short and solid mouth 1150-1275 lb cows w/175-200 lb calves and rebred 1025.00-1125.00. Medium 1-2  5 yr 1050 lb cow w/180 lb calf 1125.00; 3 yrs to aged couple pkgs 1000-1020 lb cows w/150-350 lb calves 925.00-1100.00 per pair.
    • St. Joseph, MO:
      • Bred Cows:  Medium and Large 1 (Per Head / Actual Wt) 2-4 years old 1085-1320 lbs 4-6 months bred 1200.00-1500.00; 2-8 years old 1150-1523 lbs 7-9 months bred 1650.00-1900.00; 5-8 years old 1330-1850 lbs 1-6 months bred 925.00-1200.00; 5-8 years old 1289-1655 lbs 7-9 months bred 1300.00-1700.00; >5 years old 1434 lbs 7-9 months bred 1425.00; >8 years old 1298-1572 lbs 1-6 months bred 710.00-985.00; >8 years old 1220-1738 lbs 4-9 months bred 900.00-1250.00.  Medium and Large 1-2 2-4 years old 870 lbs 4-9 months bred 850.00; 2-8 years old 1205-1395 lbs 7-9 months bred 1125.00-1350.00; >5 years old 1409-1558 lbs 7-9 months bred 1000.00-1300.00. 
      • Cow-Calf Pairs:  Medium and Large 1 (Per Family / Estimate Wt) 2-4 years old 1252 lb cow w/ 150-300 lbs calf 1900.00; >5 years old 1215-1470 lb cow 0-3 months bred w/ 150-300 lbs calf 1360.00-1500.00; 2-8 years old 1280-1480 lb cow 0-6 months bred w/ >300 lbs calf 1235.00-1575.00; >8 years old 1380 lb cow w/ >300 lbs calf 1450.00.  Medium and Large 1-2 2-4 years old 900-1095 lb cow w/ 150-300 lbs calf 1260.00-1375.00; >8 years old 1055-1255 lbs cow w/150-300 lbs calf 910.00-1000.00; >8 years old 965 lb cow w/ <150 lbs calf 500.00.  Medium 1 >5 years old 1000 lb cow w/ 150-300 lbs calf 800.00. 
    • West Plains, MO:
      • Bred Cows:  Medium and Large 1-2  2-6 yr old 1020-1505 lb cows in the 2nd-3rd stage 1150.00-1450.00 per head, 1st stage 1050.00-1100.00 per head; Seven yrs to short-solid mouth 1188-1470 lb cows mostly in the 3rd stage 900.00-1175.00 per head.  Medium and Large 2  2-7 yr old 780-1385 lb cows in the 2nd-3rd stage 700.00-1125.00 per head, 1st stage 700.00-925.00; Short-solid to broken mouth 1035-1335 lb cows in the 1st-3rd stage 650.00-900.00 per head. 
      • Cow-Calf Pairs:  Medium and Large 1-2  3-7 yr old 984-1500 lb cows with 100-300 lb calves 1250.00-1500.00 per pair, 3-n-1 pkg 4 pair 3-6 yr old 1321 lb cows in the 1st-2nd stage with 300 lb calves 1675.00 per pair; Short-solid to broken mouth 977-1360 lb cows with 100-300 lb calves 1275.00-1325.00 per pair.  Medium and Large 2 2-7 yr old 950-1175 lb cows with 100-200 lb calves 1000.00-1300.00 per pair. 
    • Riverton, WY:
      • Bred Cows: Heifers 990-1085 lbs 1500.00-1535.00, several 1100.00-1325.00, few 725.00-1010.00; Young 960-1785 lbs mostly 1400.00-1550.00, several 1125.00-1375.00, individuals or small packages 825.00-175.00; Middle Aged (Short Solids) 1130-1630 lbs 1025.00-1150.00, few 750.00-975.00; Aged (Short Term) package reputation quality 1409 lbs 1200.00, several 1150-1690 lbs 810.00-1000.00, few 660.00-785.00 all per head. 
      • Cow/calf Pairs: Young few 1075-1095 lb cows with 75-300 lb calves 1525.00-1550.00, couple 825 lb cows with 325 lb calves 1300.00; Middle Aged (Short Solids) individual 1140 lb cow with 400 lb calf 1400.00; Aged (Short Term) individual 1190 lb cow with 70 lb calf 750.00, couple (Longhorns) 945 lb cows with 200 lb calves 610.00 all per head. 
    • Arkansas:
      • Replacement Cows:  Medium and Large 1-2  2-7 year old 850-1250 lbs 2nd-3rd stage 93.00-103.00/975.00-1075.00, first stage/open 73.00-83.00, 7-10 year old 2nd-3rd stage 59.00-69.00/725.00-825.00 per head. 

      • Cow-Calf Pairs: Medium and Large 1-2  3-7 yr old 800-1200 lb cow w/100-200 lb calf 1225.00-1325.00, some to 1625.00, 200-300 lb calf 1225.00-1325.00 per pair. 
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    Canadian Cattle:
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    Alberta Beef Producers: Alberta direct cattle sales Thursday saw light trade develop with dressed sales marked at 276.00 delivered. Initial sales are positioned at the top end of last week's trading range. Buying interest in the cash market has been mixed with the bulk of sales going to one buyer. Cash to futures basis levels did weaken but remain stronger than the five-year historical average.
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    Canadian Cattle Prices:
    Prices have been converted to U.S. $/CWT. Grades changed to approximate U.S. equivalents
    Exchange Rate: Canadian dollar equivalent to $0.7949 U.S. dollars
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    Prices for the week ending February 9th:
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    The "Nord Fork"

    Replaces Flankers at Branding
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    2018 Demand for Beef... A Mild Positive Surprise
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    U.S. Demand for beef has been a mild positive surprise so far this year, reports Steiner Consulting Group.

    Last January, Choice beef values were under pressure as beef production was on its way to posting a 6 per cent increase from the first quarter of 2016. This year, beef production is again on a path to be up, with the Livestock Marketing Information Center projecting a 3.9 per cent gain. Choice beef product values, instead of faltering like they did last January have put in a stoic performance, holding steady from the first of they year through early February.

    There was a bit of a hiccup in values in mid-January as beef production was up 8 per cent during the third week of the month compared to a year earlier. Since then, weekly production has been up 3 per cent, which product demand seems to take in stride.

    The carcass component providing support for overall Choice beef values during the last month has been chucks. The increase in chuck value during the last two weeks of January was very atypical relative to normal seasonal trends. Chucks are usually merchandised through grocery stores as roasts and ground beef and the recent price trends suggest that product movement has been good through this channel.

    The majority of the increase in beef production has come from additional cows harvested at heavier weights. Weekly cow slaughter for January was up 6.7 per cent from a year earlier. Cow carcass weights were 2.5 per cent heavier, providing a rough estimate for beef production coming from cows increasing by 9.3 per cent. Similar calculations for beef production coming from bulls shows a 3.6 per cent increase in January.

    Cow and bull beef production is the primary source of beef trimmings and the tally for this category of beef production is up 8.8 per cent from January 2017. Even with this increase in supply, lean trimmings prices have sustained an uptrend. More chucks from steers and heifers being sold as roasts instead of being ground for trimmings probably is a factor limiting pressure on trimmings values.

    The normal seasonal trend in chuck values in upcoming months (downward) should lead to more chucks going into ground beef production, which will put pressure on lean trimmings values. Historically, when cow and bull beef production increases by more than 10 per cent in a year, lean beef trimmings prices are vulnerable to going to a discount to the Choice Beef Cutout.

    Just to show the range that the price spread between the Choice carcass value and lean trimmings priced can take, lean trimmings prices in January were premium to the Choice Beef Cutout by 6 cents per pound. In January 2017 the premium was 8 cents, but in January 2016 trimmings were discounted 26 cents per pound to the Choice carcass value.

    Looking at the interval between 2012 and this year, the only years when Chuck Roll prices increased from the start of the year to early February was this year and 2016. In that year, Chuck Roll prices declined 16 per cent by the end of March.

    Also in 2016, 90 per cent lean trimmings prices actually went up from January to March by 8 per cent, but were still at a discount to the Choice Beef Cutout by 7 cents in March. On the supply side of the market, First Quarter 2016 cow and bull meat production was only up only 1.5 per cent from four quarters earlier, a modest gain compared to this year.

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    Cattlemen Have 'Beef' with 'Fake Meat'
    FoodDive.com
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    The U.S. Cattlemen’s Association has petitioned the U.S. Department of Agriculture to limit the definition of "beef" and "meat" to products made "from cattle born, raised, and harvested in the traditional manner," according to Meat and Poultry News. The group's request would restrict from such labeling any products "coming from alternative sources such as a synthetic product from plant, insects, or other non-animal components and any product grown in labs from animal cells."

    In a separate announcement, the National Cattlemen's Beef Association (NCBA) said that working to keep the industry and consumers away from "fake meat and misleading labels on products that do not contain real beef" would be a major part of its 2018 policy agenda. "We're going to continue to ensure fair access to foreign markets, fight against unnecessary regulation, make sure the Farm Bill addresses our needs, and guarantee that consumers have the ability to purchase a safe, healthy, and accurately labeled protein source," Kevin Kester, incoming NCBA president, said in the statement.

    Due to the growing popularity of plant-based meat alternatives from, among others, Beyond Meat, Impossible Foods and Sweet Earth — plus the ongoing development of cell-cultured products from Memphis Meats and JUST (formerly Hampton Creek) — it was only a matter of time before the meat industry took notice.

    There are several good reasons for this. According to HealthFocus data, 17% of U.S. consumers eat a predominately plant-based diet, and 60% claim to be reducing their consumption of meat-based products. Of those consumers cutting down on their intake of animal proteins, 55% say the change is permanent. This evolving consumer mindset is making major financial waves as well — in 2016, total plant-based meat sales topped $606 million. 

    Also of concern is that carnivores make up a large proportion of those who buy plant-based protein. For example, the makers of Beyond Burger estimate that approximately 70% of those who buy their products are meat eaters, according to an article from Food Navigator. These people are known as "flexitarians," meaning they consume beef, chicken and other animal-derived products but are cutting back on their overall meat intake. As a result, Beyond Meat reported triple-digit sales increases last year. 

    The impetus behind the trend toward plant-based foods varies, with some consumers interested in trying to limit cholesterol from animal products, while others are concerned about sustainability factors, environment impacts and/or more humane treatment of farmed animals.

    There's also the notion of lab-grown "clean meat," which may appeal to those who prefer not to kill animals in order to enjoy a steak or a hamburger. However, the beef industry claims that the end result of developing "cultured" meat in a lab from animal tissues could be the elimination of animal agriculture, or cutting it back in a major way, potentially leaving vast amounts of grazing land idle.

    U.S. consumers do have mixed feelings about their meat consumption. Most are carnivores — USDA projects an average per-capita consumption of 222.2 pounds of red meat and poultry in 2018, which is a record high. Nevertheless, they still would like to see a ban on slaughterhouses. A recent Oklahoma State University survey found that while more than 90% of U.S. consumers eat meat, 47% of them agreed with the statement, "I support a ban on slaughterhouses." The survey also asked whether they knew slaughterhouses were integral to meat consumption, and 73% responded that they did.

    Today, the beef industry finds itself in a somewhat similar situation to the dairy industry, which is trying to stop plant-based beverages from using the term "milk." The U.S. Food and Drug Administration reportedly opposed calling soy-based dairy beverages "milk" in 2011 and favored the use of "beverage" or "fortified beverage," but USDA decided the other way. The dairy industry continues to fight this battle, however, and members of Congress have sponsored bills to stop plant-based foods from being labeled with any dairy product names. However, these efforts have yet to gain any serious traction.

    As further proof that plant-based meat alternatives are here to stay, several meat processors and packers have bought into such companies in the recent past. These M&A moves may appear ironic, yet they signal enthusiasm about the current popularity of the sector and optimism about its future growth.

    For example, acquisitions like Nestle's deal with Sweet Earth could become more prevalent, according to Forbes, as the global meat-substitutes market is projected to hit $5.96 billion in 2020. That segment could also make up one-third of the plant-based foods market by 2050. Tyson Foods, best known for its chicken, beef and pork, entered the game last year through its 5% stake in plant-based company Beyond Meat. Canada's Maple Leaf Foods, a packaged meats provider, has also made an investment in plants. It announced late last year that it would buy vegan meat and cheese maker Field Roast Grain of Seattle, a premium maker of grain-based "meat."

    While all these developments are a focus of the beef industry, efforts to limit labeling terms aren't likely to stop them. It's also possible that the beef industry could win this particular battle but still lose the war. Most consumers know the difference between "meat" from an animal and "meat" from plant-based ingredients and aren't likely to be confused on that score. And even if USDA ends up buying the industry's arguments and restricting the words permitted on packaging, chances are producers of meat alternatives will get around that by simply changing the way they label their products.

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    USDA National Retail Beef Report:
    Advertised Prices for Beef at Major Retail Supermarket Outlets
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    This week in Beef Retail, the Feature Rate saw a 2.4 percent increase, the Special Rate saw a 3.5 percent increase, and the Activity Index posted a 17.6 percent increase. With the Super Bowl now in the past, Beef has reclaimed its place in retails ads across the country. Cuts from the Rib, Chuck, Round, and Loin saw the most ads space while Brisket and Ground Beef saw less. Cattle slaughter under federal inspection fell by 3.3 percent when compared to last week.
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    Photo of the Week:
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  • Polled Hereford Bred Heifers... E. Central OK*^
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    "Shootin' the Bull" Weekly Analysis:
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    In my opinion, the cattle market remains in a friendly environment due to employment, wages, and tax cuts.  A couple things are becoming apparent.  The most interesting being what I perceive as excellent demand due to palate over pocket book.  I've watched poultry stocks increase over the past several months.  All the while, broiler and fryer production has remained the same or declined slightly.  With pork, it is a little different, but as stocks are building, so to is production.  I believe both to be suffering from the increase of beef consumption and its lower price discrepancy between the two than in times past. An accomplishment was made this week in most of the contract months.  The previous highs made on 1/25 and 2/5 were exceeded this week and closed above.  This suggests that a minor wave 1 and 2 are complete and minor wave 3 is in progress.  The oscillator turned back up solidly by weeks end without having gone back below the zero line.  Upside potential for minor wave 3 is $136.12 April.  I would dare to say that equity traders are done robbing Peter to pay Paul.  Although equities are anticipated to remain volatile, I don't think there is much left to liquidate in commodity accounts that would do much good on another route in the equity market.  I believe what we are witnessing in the cattle market at present is the need of the packer to own inventory, with razor thin margins, and not wanting to tip their hand to needs.  Vertical integration is perceive to have increased through 2017.  With working capital always an issue, and the increasing export demands, more companies or operations joined vertical integration to insure capital requirements and to meet the needs of demand. 

    So, what I see is strong demand and under vertical integration, those involved "have" to meet the requirements of delivery.  With the disruption in growing patterns, placing stockers on feed, and extremely current marketing's, the steady supply is now a broken line.  The holes are anticipated to create issues like at present.  Two weeks prior to seasonal demand increasing greatly and most fat contract months are within striking distance of contract high. Even more important than this, recall last weeks comments on the equity market route and inflation.  Are neither of those factors pertinent today? No, they are not.  Cooler heads are now prevailing and the direction beef prices took is higher.  Now, to speak clearly from both sides of my mouth.  Yes, I do believe fats and feeders will both trade higher.  Yes, I do believe that this is an excellent environment to market inventory into.  So, chose your marketing's carefully and attempt to use options and options strategies over futures.  For the fats, I am going to attempt to market some inventory with an at the money $134.00 April put were the underlying futures to trade to this level.  This would be shy of my target by $2.00 and maybe provide some leeway up to $136.00.  Once the puts are acquired, then I want to wait to see what the next move looks like.  Upon that direction being found, I will then look to sell a put or call to help reduce the premium paid for the initial put and secure a window in which to market the physical. 

    Feeders are lagging at the moment because everybody wants to know the same thing, "what will the spring feeder cattle crop be?"  I know there are plenty of stockers placed that will become feeders in April, May and June, but what about the 800# to 900# steer ready to go on feed in April or May?  Will there be a 25% to 35% decline in feeder cattle inventory this spring?  I don't know, but I do know that every stocker placed will not be available to the open market again as feeders.  I believe commercial yards bought those stockers and that is most likely due to them having commitments in the future that they now have wrapped up. Take a look at the weekly continuation chart.   There is one on my website if you don't have one.  There are two peaks and more often than not, a third peak will make itself known at some point in time.  I think we are on the verge of making that third peak.  Therefore, again talking out of both sides of my mouth, I anticipate feeder prices to move higher, but creating an opportunity to market inventory into.  I continue to view the $155.00 area due to its close proximity to the two weekly chart peaks, and the profitability I believe it brings to a large portion of cattle.  If this price can be secured with a put option, then I believe at some point in the more distant future, the sale of a put or call to reduce this premium would help to produce a higher minimum sale price.  I do not want to be short this market for the sake of being short and I do not want to use futures to market inventory. 

    What I don't anticipate is a runaway market.  I don't see an aspect to where there is going to be a shortage of feeder cattle.  I do think there are significant disruptions of distribution and those will create holes.  If those holes create a price spurt, then I will use that to further pursue marketing of inventory.  My recommendation is to buy the at the money put options, on the month you need, when the underlying futures contract trades to as close to $155.00 as you can stand.  Once you stop squealing like a stuck hog for paying that kind of premium, focus on the next $10.00 to $15.00 move.  Whether higher or lower, the potential to sell a put or call will reduce a portion of the premium, raise the minimum sale floor, and produce a window in which your physical inventory will be marketed in. Yes, it does sound easy.  No, in no way is it.  Spreads are impacting the contract months that it may be more difficult to achieve a price on one month than another.  While this may be difficult, attempt to market your physical inventory as close to the expiration of the futures/options contract as you can. 

    Grains sidestepped all week long. Wheat has built a major contracting wedge with an upward slant to it.  This is friendly in my analysis.  Corn continues to try to stay higher while beans have moved towards contract high.  The meal market is the leader in all of this.  Significant increases in hog production and stable production of poultry is keeping meal elevated.  Energy prices were volatile at weeks end.  Although I do not want to participate in a futures or options trade in energy, I do highly recommend you visit with your fuel provider and lock in a large portion of your spring needs today.  If nothing else, top off the farm fuel tanks.

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    Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com

    An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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    Nebraska Repeats as Top Beef Exporter in 2017 
    Reuters
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    Nebraska topped all other U.S. states for beef exports in 2017 for a second year in a row, its governor said on Tuesday in a statement that cited the state's abundance of feed grain, packing capacity and cattle feeding operations.

    Last year Nebraska exported $1.26 billion worth of beef, according to the U.S. Department of Agriculture’s Global Agricultural Trade System (GATS).

    It showed Nebraska's pork export markets took in $479 million worth of product in 2017, a 20 percent increase from the previous year to become the fifth largest U.S. pork exporting state.

    “This impressive growth in Nebraska’s beef and pork exports shows how effective international trade is to growing our state,” said Nebraska Governor Pete Ricketts the statement.

    Jim Robb, director of the Colorado-based Livestock Marketing Information Center, in part, attributed Nebraska's top beef export ranking to it being the home of some of the nation's largest packing plants. It is also in the western Corn Belt and feedlots are located throughout the state, Robb added.

    With respect to hog farms, USDA's most recent quarterly hog report listed Nebraska as the fifth largest hog producing state, well behind industry leader Iowa where the hog population is highest.

    Robb said these data underscore how crucial the ongoing North American Free Trade Agreement discussions are for the major agricultural states. 

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    U.S. Dollar - 6 Month Chart:
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    Over the last 5 years, an average of around 10% of U.S. beef production has been exported, making exports an extremely important factor affecting beef and cattle prices.  A strong dollar depresses export demand.
  • U.S. Dollar Index
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    Choice Boxed Beef Cutout, Slaughter, & Feeder Steers:
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    Boxed beef cutout values higher on Choice and Steady on Select on moderate to fairly good demand and moderate to heavy offerings. Select and Choice rib, chuck, and round cuts mostly steady while loin cuts steady to firm. Beef trimmings moderately to sharply higher on moderate demand and light offerings.

    The average value of hide and offal for the five days ending Fri, Feb 16, 2018   was estimated at 10.27 per cwt., down 0.06 from last week and down 1.63 from last year.

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    Restaurant Performance Index at 3 Year High
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    The National Restaurant Association's Restaurant Performance Index (RPI) is a monthly composite index that tracks the health of and the outlook for the U.S. restaurant industry. Launched in 2002, the RPI is released on the last business day of each month.

    Driven by stronger same-store sales and customer traffic levels, the Restaurant Performance Index (RPI) registered a solid gain in December. The RPI stood at 102.9 in December, up 1.8 percent from a level of 101.1 in November.

    The Current Situation Index stood at 102.9 in December - up 3.4 percent from a level of 99.6 in November. December's reading represented the first time in four months that the Current Situation Index was in expansion territory about the 100 level.

    The Expectations Index stood at 102.9 in December – up from a level of 102.6 in November. The Expectations Index is now at its highest level in nearly three years, after increasing in each of the last four months.

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    Consumer Sentiment Climbs to 2nd-Highest Level in 14 Years
    MarketWatch
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    The numbers: The University of Michigan said its consumer-sentiment index rose to a reading of 99.9 in February, up from 95.7 in January and the second-highest level in 14 years.

    What happened: There were big gains in both the current economic conditions and the expectations indexes.

    The big picture: With a strong jobs market and solid economic growth, consumers have been confident. While analysts had expected some impact from the volatile stock market, it wasn’t a factor — just 6% of all consumers discussed it. The University of Michigan said favorable references to government policies were cited by 35% in February, unchanged from January, and the highest level recorded in more than a half century.

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    Feeder Steers/Corn Correlation:
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    Historically, the value of 25 bushels of corn is approximately equal to the price per cwt. for feeder steers.
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    Slaughter Cows & Bulls:
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    Slaughter cows and bulls sold steady to 3.00 higher.  Packer demand good. 

    Cutter Cow Carcass Cut-Out Value Friday at noon was 172.28 -- Up 1.75 from last week.

                   Weight         Colorado         Oklahoma       Alabama 
    Breakers 1100-1600  65.00-69.00     61.00-64.00        N/A 
    Boners    1000-1450  64.00-68.00     62.00-65.00    58.00-63.00
    Lean       1000-1300  60.00-64.00     60.00-63.00    53.00-58.00
    Bulls       1300-2500  84.00-87.00     86.00-90.00    77.00-81.00
     

    Daily Direct Cow & Bull Negotiated Report:

                  # Head  Week Ago Year Ago  YTD   Year Ago
    National    8,503    7,207       7,596     41,187   39,029
    S Central  2,764    1,474       2,317     14,329   11,586
    N Central     811    1,070          718       3,844     3,171
    East          2,172    1,708       1,299     10,230     7,980
    West         1,136    1,334       1,468       4,978     7,900
    Midwest    1,620    1,621       1,794       7,806     8,392

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    Est. Weekly Meat Production Under Federal Inspection:
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    Total red meat production under Federal inspection for the week ending Saturday, February 17, 2018 was estimated at 1006.2 million lbs. according to the U.S. Department of Agriculture's Marketing Service.
    This was 0.2 percent higher than a week ago and 3.1 percent higher than a year ago.  Cumulative meat production for the year to date was 2.7 percent higher compared to the previous year.
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    Weekly Hay Reports: "Click" on links for detailed report
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    Weekly Feedstuffs Market Review:
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    The USDA reports feed ingredient prices for the week ending February 13, 2018 were mixed. 
    • Soybean Meal was 23.00 to 42.50 higher. Cottonseed Meal was steady to 35.00 higher. Canola Meal was 33.50 to 35.00 higher. Linseed Meal was steady to 10.00 higher. Sunflower Meal was steady to 10.00 higher. 
    • Whole Cottonseed was steady to 5.00 higher. 
    • Crude Soybean Oil was 159 to 184 points lower. Crude Corn Oil was 145 points lower. 
    • Ruminant Meat and Bone Meal was mixed, 5.00 lower to 20.00 higher. Ruminant Blood Meal was steady to 50.00 lower. Feather Meal was steady to 15.00 higher. Menhaden Fishmeal was not well established. 
    • Corn Hominy was steady to 2.00 lower. Corn Gluten Feed was steady to 3.00 higher. Corn Gluten Meal was steady. 
    • Distillers Dried Grain was mixed, 10.00 lower to 5.00 higher. 
    • Wheat Middlings were mixed, 10.00 lower to 5.00 higher. Wheat millrun was steady to 9.00 higher.
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    5 Year Bullish/Bearish Consensus Charts:
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    The theory behind the "Bullish/Bearish Consensus" indicator is when the public reaches a consensus, they are usually wrong:
    • They get too bullish after prices have risen and too bearish after they have already fallen.
    Because of this tendency, there are often extremes in opinion right before major changes in trend:
    • When the public reaches a bullish extreme, i.e., a great majority thinks prices will keep rising, then prices often decline instead. 
    • And when they become too bearish, then prices tend to rise.
    So when Public Opinion moves above the red dotted linein the chart, it means that compared to other readings over the past year, you're seeing excessive optimism. You also want to look at the absolute level of Opinion, too - if it's at 90%, then there's no question we're seeing an historic level of bullish opinion.  Watch for readings above 80% (or especially 90%) to spot those dangerous times when the public is overly enthusiastic about a commodity.

    Conversely, when Public Opinion moves below the green dotted line, then the public is excessively pessimistic about the commodity's prospects for further gains compared to their opinion over the past year.  Looking for absolute readings under 20% (or especially 10%) often indicates an upturn in the market.

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    Bullish/Bearish Consensus: Cattle
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    Bullish/Bearish Consensus: Corn
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    Stock Markets & Economic News:
    T. Rowe Price 
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    STOCKS FOLLOW WORST WEEK IN TWO YEARS WITH BEST ONE IN OVER FIVE
    Stocks carried over the momentum they had recaptured the previous Friday and recorded their best weekly gain since early 2013. The technology-heavy Nasdaq Composite performed best, helped by solid gains in the stocks of Apple and networking equipment maker Cisco Systems. Along with information technology, the financials, health care, and industrials and business services sectors also outperformed within the S&P 500 Index, while energy shares lagged despite a sharp rally in oil prices on Wednesday. Having entered correction territory—or a decline of 10% or more off recent peaks—the previous week, the indexes ended Friday with gains for the year to date and only 4% to 5% off their January highs.

    INVESTORS TAKE HIGHER INFLATION SIGNALS IN STRIDE
    The market’s rebound appeared to be driven in large part by diminishing fears about higher inflation and interest rates. Wednesday morning’s consumer price inflation data came in a bit higher than expected, on both a core (excluding energy and food prices) and overall basis. Stock futures dropped on the release of the figures, but the market recovered its footing later in the day and ended solidly higher. A sharp rise in the prices of apparel and home furnishings and supplies was responsible for much of the rise in core inflation, but T. Rowe Price Chief U.S. Economist Alan Levenson notes that a similar spike in those categories a year ago was offset by declines in later months. Producer price data, released on Thursday, was in line with consensus estimates, overall, but higher than anticipated on a core basis. T. Rowe Price traders noted that the report again seemed to have little impact, however.

    The firm’s traders also observed that volatility measures fell back during the week, while trading volumes declined Tuesday to their lowest level in over a month. Exchange-traded funds and systematic trading vehicles, while continuing to play a higher-than-average role in trading activity, also diminished somewhat in importance. Nevertheless, market participants were keeping a particular eye on so-called “risk parity funds,” a type of investment vehicle that shifts allocations between assets in response to volatility, as a potential source of further selling.

    ECONOMIC DATA ARE MIXED, BUT CORPORATE PROFITS CONTINUE TO SURPRISE ON UPSIDE
    Aside from inflation, the week’s economic data were mixed. Retail sales fell 0.3% in January, with core retail sales (excluding autos and gasoline) falling 0.2%, the largest drop in nearly a year. December sales were also revised downward. Weekly initial jobless claims rose slightly but remained near historic lows. Industrial production also fell slightly in January, weighed down by a decline in mining output. Corporate profit growth seemed to be continuing to fire on all cylinders, however. Data and analytics firm FactSet revised its estimate of fourth-quarter profit growth for the S&P 500 further upward, to 15.2% (on a year-over-year basis)—its best pace since late 2011.

    Perhaps reflecting the balance between higher inflation data and mixed economic signals, the yield on the 10-year Treasury note touched a new four-year high of 2.93% but ended the week only modestly higher. (Bond prices and yields move in opposite directions.) Municipal bonds outperformed Treasuries, although T. Rowe Price analysts noted that investors continued to be selective in regard to new issues. Selling by large institutional investors also hung over the municipal debt market.

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    U.S. Stocks:
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    Drought Relief Expected to Help Grain & Cattle Outlook
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    Drought conditions have been widespread across the United States due to the La Niña weather pattern seen in the area for the past few years, but relief could be seen soon.

    CattleFax meteorologist Art Douglas discussed the weather outlook during the 2018 Cattle Industry Convention and NCBA Trade Show in Phoenix, Arizona.

    CattleFax meteorologist Art Douglas said we should expect to get through the next three months and then see relief from the drought.

    “The two forecast systems we use are predicting the possible transition from La Niña conditions to a weaker El Niño by the summer,” Douglas said. “U.S. weather patterns over the next three months will be dictated by La Niña. However, warming at the equator could shift drought patterns across North America by late spring and summer.”

    The temperature forecast through May shows gradual warming across the southern U.S. after a colder February in north central states.

    While Hurricanes Harvey and Irma have given some moisture relief in the southern U.S., there are still other areas suffering from extreme drought conditions. Spring planting in the Corn Belt could have drier soils in the west and wetter soils from Iowa to Ohio. The lack of moisture in the southern Plains will be tough on winter wheat and pasture growth, according to Douglas.

    “If weaker El Niño conditions develop this summer, conditions at that time could be milder through the Midwest, but drier soils in the Plains and Southwest could create feedback mechanisms that increase heat in these areas. The Northwest and northern Rockies may have the only reliable grazing into late spring and summer,” Douglas said.

    The La Niña conditions will continue to cause drought conditions in Argentina and northern Brazil for the remainder of the summer growing season. Australian cattle growing areas have developed drought conditions also. These drought conditions in other areas of the world will lead to the need for more grain and beef production in the U.S.

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    "Click Here" to view a Slide Show of Drought Monitor maps for the last 12 weeks
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    Looking Ahead:
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    An unsettled weather pattern will maintain periods of rain and snow over much of the nation, although pockets of dryness will persist. A series of storms will bring moderate to heavy rain and mountain snow to much of the west, although unfavorably dry conditions will persist from California into western Nevada. East of the Rockies, an active southern storm track will bring much-needed precipitation to locales from southeastern New Mexico across the southern two thirds of Texas into southern Oklahoma and the northern Delta. Despite the welcomed storminess, dry weather will linger from the south-central Plains into western Missouri as well as over the lower Southeast. Farther north, another round of moderate to heavy snow is expected from Montana into the Great Lakes and eastern Corn Belt, and may include the Mid-Atlantic as well as Northeastern States. 

    The NWS 6- to 10-day outlook for February 20 – 24 calls for near- to above-normal precipitation over much of the nation, in particular areas east of the Mississippi save for Florida and the lower Southeast, where drier-than-normal conditions are expected. Below-normal precipitation is also anticipated in the Southwest and on the southern High Plains. Above-normal temperatures over the southern and eastern U.S. will contrast with colder-than-normal weather from the Pacific Coast States into the upper Midwest.

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    Outlook for Real Feeder Cattle Prices
    John Nalivka... Sterling Marketing, Inc.
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    As I sat down to write on a couple of key dynamics of this year’s beef industry outlook that I think are significant, I was thinking that perhaps, with the recent introduction of meat produced in a lab or plant based protein, I might qualify that I am talking about the real beef industry. In fact, a new certification may be in order – “Certified Genuine Beef from Cattle that Graze.” Maybe that label is too long. How about “Certified Real U.S. Beef?” At any rate, on to the topic at hand.

    In 2018, real beef production will be up 6% from 2017 as herd expansion coupled with growing production efficiency continues to take hold. Last year, the beef industry produced 745 lb. of beef per cow and will jump to 774 lb. in 2018. In addition, 5% more pork and 2% more poultry meat will bring the total per capita supply to over 222 lbs., a new record exceeding the previous record seen in 2007.

    This year’s beef production coupled with projected imports and exports of U.S. beef will lead to a 10% increase in per capita beef use from the liquidation-led 60 year low in 2015. There is generally consensus across the industry that exports will continue to take a leading role if markets are to remain relatively robust with this much of an increase in per capita supply of not only beef but total meat. And, based on export performance during 2017, we can be quite optimistic about exports, even in the face of uncertainty about trade agreements.

    Key to the feeder cattle and calf price outlook is the feeder cattle supply (estimated from cattle inventory), forage conditions, feeding margins and feedlot demand and thus, fed cattle prices.

    But, in addition, cow-calf profits and the impact on the decision to breed or feed heifers is key to the dynamics of the feeder cattle supply.

    So, the feeder cattle supply at the beginning of the year was down 2% from a year earlier and about the same as the Jan. 1, 2016 feeder supply. Again, this can change based on the heifers. But, the current estimated supply would suggest that feedlot placements this year would be down about 2% from last year’s large number (+9%).

    My feedlot placement projection assumes about 88% of the feeder supply would be placed on feed – about the same as last year. Again, that percentage varies according to decisions on heifers and markets.

    Using this analysis of feeder cattle supply and expected feedlot placement activity suggests a sharply declining cattle-on-feed inventory as the year progresses. Furthermore, I submit that it paints a relatively optimistic outlook for feeder cattle and calf prices. As always, I advise against throwing caution to the wind. The wild cards are still weather (drought), exports, heifer retention, and USDA’s tally book!

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    Feedyard Closeouts: Profit/(Loss)
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    Closeout projections are for cattle placed on feed by a cattle owner at a commercial feedyard and not for cattle owned by a feedyard and fed at cost or a farmer/feeder utilizing his own feed.

    Typical closeout for un-hedged steers sold this week:

    • Placed On Feed 165 days ago = September 4th
    • P/(L) based on the futures when placed on feed: ($24.22)
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    Cost of 750 lb. steer delivered @ $147.56 per cwt:       $1,106.70
    Feed Cost for 600 lbs. @ $73.22 per cwt:                        $439.32
    Interest @ Prime + 2% on cattle cost for 165 days:            $28.77
    Interest @ Prime + 2% of the feed cost for 165 days:          $5.71
    Total Cost & Expense:                                                $1,580.50
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    Sale proceeds: 1,350 lb. steer @ $130.00 per cwt:    $1,755.00
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    This week's Profit/(Loss) per head:                             $174.50
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    Profit/(Loss) per head for previous week:                          $148.99
    Change from previous week:                                               $25.51
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    Sale price necessary to breakeven:                             $117.07
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    Projected closeout for steers placed on feed this week:
  • Projected Sale Date @ 165 days on feed = July 31st
  • Cost of 750 lb. steer delivered @ $148.10 per cwt:       $1,110.75
    Feed Cost for 600 lbs. @ $74.92 per cwt:                        $449.52
    Interest @ Prime + 2% on cattle cost for 165 days:            $31.38
    Interest @ Prime + 2% of the feed cost for 165 days:          $6.35
    Total Cost & Expense:                                                $1,598.00
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    Sale proceeds: August Futures @ $115.62 per cwt:   $1,560.87
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    This week's Profit/(Loss) per head:                           ($37.13)
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    Profit/(Loss) per head for previous week:                        ($74.70)
    Change from previous week:                                             -$37.57
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    Sale price necessary to breakeven:                            $118.37

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    Typical closeout for hedged steers sold this week: ($24.22)
    Typical closeout for un-hedged steers sold this week: $174.50
    Projected closeout for steers placed on feed this week: ($37.13)
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    Slaughter Cattle:
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    Slaughter Cattle: Friday negotiated cash trade was moderate on good demand in all feeding regions. Early live purchases in the Southern and Northern Plains have been reported from 129.00-130.00. Dressed purchases in Nebraska and the Western Cornbelt traded dressed purchases traded 5.00 higher at 205.00. 

    Negotiated Sales: Confirmed: 25,170   Week Ago: 7,111   Year Ago: 4,756

    Formula Purchases: Net - Dressed
    Head count priced today: 21,700
    Weighted avg weight:    849.00
    Weighted avg net price: 200.28

    Livestock Slaughter under Federal Inspection:

                                         CATTLE      CALVES    HOGS         SHEEP
    Friday  (est            115,000     2,000      450,000     7,000
    Week ago (est)      111,000     2,000      435,000     5,000
    Year ago (act)       108,000     3,000      437,000      6,000
    Week to date (est) 575,000   10,000   2,300,000    37,000
    Last Week (est)     575,000   10,000   2,293,000    39,000
    Last Year (act)       547,000   10,000   2,133,000    36,000

    Saturday  (est          21,000        0            84,000         0
    Week ago (est)        16,000        0            96,000         0
    Year ago (act)         30,000        0           222,000       1,000
    Week to date (est) 596,000   10,000   2,384,000      37,000
    Last Week (est)     591,000   10,000    2,389,000     39,000
    Last Year* (act)     576,000   10,000    2,356,000     36,000
    2018 YTD           4,164,000   73,000  16,464,000   251,000
    2017 *YTD          4,056,000   72,000  16,215,000   255,000
    Percent change       2.7%         1.5%        1.5%         -1.5%

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    National Grain Summary:
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    Compared to last week, cash bids for corn, wheat and sorghum were mixed, soybeans were higher. Soybeans continued to push higher through yesterday, closing 22 ½ cents higher on the week.  This bullishness could be fueled by continued concerns of dry weather in South America.  Last week’s export sales and shipments totaled 77.7 million bushels and 34 million bushels of corn, 23.5 million bushels and 50.5 million bushels of soybeans, and 11.4 million bushels and 18 million bushels of wheat.  All export sales and shipments data for last week could be viewed as bearish.   Wheat was mixed from 11 1/2 cents lower to 15 1/2 cents higher.  Corn was mixed from 3 cents lower to 4 cents higher.  Sorghum was mixed from 15 cents lower to 3 cents higher. Soybeans were 36 1/2 to 55 1/2 cents higher.

    Corn futures closed the Friday session with fractional losses, as nearby March was 1.52% higher on the week. The USDA reported a private export sale of 116,000 MT of 17/18 corn to Japan through their daily reporting system this morning. Export commitments of corn are now 69% of the full year USDA forecast. Last year at this time was 76% complete, with the average running 70% for this week. This afternoon’s CFTC Commitment of Traders report showed spec funds in corn futures and options trimming their net short position by 72,310 contracts. Their net position as of Feb 13 was -10.614 contracts. Brazil’s 17/18 corn production number was updated to 89.463 MMT by analysts with Safras & Mercado on Friday.

    Wheat futures ended Friday with KC fractionally mixed, as most CBT and MPLS contracts were 3-4 cents lower. The markets will be closed on Monday in observance of Presidents Day. Informa expects to see the spring wheat acreage for this year’s crop hit 11.25 million acres, up a little from 2017 acres. Their total acreage number for all wheat is 46.14 million acres, slightly above last year. Typically export commitments are 89% of the USDA export projection by this time, with last year at 91%. This year, however, is only 82% of the number. The COT report showed spec funds in CBT wheat options and futures lower their net short position by 26,563 contracts to -56,831 contracts as of 2/13.

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    Five Year Moving Average - Corn & Wheat:
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