The Cattle Range Home Page
The Cattle Range Home Page
www.cattlerange.com
.

.
.
SAMPLE... Market Summary for the week ending August 21st:
.
.

.
The Cattle Range 10 Day Market Trend:
.
Bearish: The cattle/beef complex continues to face weak demand and increasing supplies plus a massive dose of international economic panic.
.
.
The Trendline is an indicator of overall cattle/beef market strength and is based on daily market factors for the last 10 days.
  • Each daily factor is the aggregate weighted total of the Gain/(Loss) for 10 major market indicators compared to the previous trading day.
  • The angle indicates direction & velocity of the trend.
.

.
.

On-Line Store
.

.
National Feeder & Stocker Cattle Weekly Summary:
.
RECEIPTS:  Auctions  Direct    Video/Internet   Total
This Week     136,300     24,500        17,400          178,200 
Last Week     129,900     53,100        46,700          229,700 
Last Year       138,400     70,100       146,200         354,700 

Compared to last week, calves and yearlings traded weak to 5.00 lower with a number of instances 10.00 lower from midweek on.  Direct sales traded steady to 2.00 lower early in the week, then turning 3.00-7.00 lower late week.  Cattle futures seem to keep the focus on the bearish side, not wanting to show much life.  Cattle futures on Wednesday reared their ugly head closing with sharp triple-digit losses, making new lows for the month.  Market psychology keeps focus on negative fundamentals, with plentiful supplies and lower prices for competing meats, struggling outside markets, lower meat exports and the focus of trading the market on what is happening right now. 

The Stock Market is on course for its lowest finish of the year, as the Dow closed over 350 points lower on Thursday dropping below 17,000 points.  Stocks fell sharply on global growth worries that rattled the markets from China to Germany and the U.S.  It was the Dow’s worst performance in 18 months.  Losses then continued on Friday as the global market rout deepened with the Dow losing over 500 points on Friday as of this writing.  Oil futures are also hovering near 6-year lows at near 40.00 a barrel.  This attitude and volatility dominates the market at this time.  Global worries also swamped the cattle complex on Friday as Feeder Cattle futures dropped limit down. 

Lack of fed cattle support made its impact and weighed heavy on the feeder cattle market this week as fed cattle trade on Wednesday was 4.00-6.00 lower on dressed sales in Nebraska ranging from 232.00-234.00.  Any leverage that tight fed cattle numbers may hold doesn’t seem to matter as demand remains light to moderate at best.  In the next 30-45 days auctions should see a good number of feeder cattle moving off pasture into feed yards.  Unless the fed cattle market gets a move up the feeder cattle market won’t be able to maintain the premiums that has been paid for yearlings and calves the previous months.  Despite lower prices this week it was still pretty optimistic in Valentine, NE on Thursday selling near 485 head of yearling steers weighing 900-950 lbs averaged 917 lbs sold with a weighted average price of 212.52.  Near 775 head of their bigger brothers averaged 964 lbs sold with a weighted average price of 205.76. 

Time is running out to take advantage of summer grilling demand and with the fed cattle market remaining stagnant, cut-out values have made some steady gains over the last couple of weeks heading into Labor Day Weekend.  But boxed-beef values closed on lower on Friday, following commodity markets lower as Choice cut-out closed down 1.56 at 244.90. 

This week the Pro Farmer Crop Tour is being conducted through the Eastern and Western Corn Belt and through the Midwest.  So far corn yields in Indiana 142.9 bpa, Ohio 148.4 bpa, Nebraska 165.2 bpa and Iowa 180.2 bpa are below USDA estimates with South Dakota 165.9 bpa and Minnesota 190.8 bpa above USDA estimates and Illinois pretty much unchanged at 171.6 bpa.  The big question remains whether or not good yields in the Western Corn Belt will compensate for lower yields in the Eastern Corn Belt; so far corn yields on the Pro Farmer Tour will not increase from USDA’s estimates. 

.ms
.
Stocker Steers:
.
Feeder Steers:
.
.
Five Year Moving Average - Stocker Steers, Feeder Steers, & Slaughter Steers:
.
.
Cattle Futures: Live cattle, as well as hogs, traded substantially lower Friday as the sell-off in the macro markets ensued. It remains to be see whether the rout today was mostly macro-themed and whether or not live cattle futures have room to go before hitting a seasonal low. The USDA Cattle on Feed report mostly met expectations and will probably have minimal impact upon Monday’s opening. October cattle dropped 2.70 cents to 143.85 cents/pound Friday, while April futures fell 2.55 cents to 144.75. Meanwhile, October feeder cattle futures dropped lower 4.5 cents to 199.47 cents/pound Friday, while January feeders lost 4.5 cents to 191.22.
.

.
Selected Auction Reports:
"Click" on individual auction links for complete report

Oklahoma National Stockyards - Oklahoma City OK
Actual Receipts:  6,044   Last Monday:  4,695   Year Ago Monday:  4,691
Compared to last week:  Feeder steers 1.00-5.00 lower.  Feeder heifers sold steady in a limited test.  Steer and heifer calves sold steady to 5.00 lower.

El Reno Cattle Narrative - El Reno OK
Receipts:  6027    Last Week:  3520    Year Ago:  3804
Compared to last week:  Feeder steers sold 7.00-9.00 lower. Feeder heifers 8.00 lower in a very light test.

Toppenish, WA Livestock Auction - Toppenish WA
Receipts:  1750    Last Week:  1500    Year Ago:  2800
Compared to last Thursday at the same market, stocker and feeder cattle 10.00-18.00 higher. Slaughter cows and bulls 1.00-to 5.00 higher.

Joplin Regional Stockyards Feeder Cattle Wtd Avg - Carthage MO
Receipts:  3089    Last Week:  2569    Year Ago:  4570
Compared to last week steers steady to 5.00 lower and heifers under 450 lbs 8.00 to 20.00 higher, over 450 lbs steady to 5.00 lower.

Cattleman's Livestock Auction - Dalhart, TX
Cattle and Calves: 768         Week ago: 1103        Year Ago: 686
Compared to last week:  Not enough feeder steers and heifers on offerfor adequate market comparison however lower undertone noted.  Slaughter cows firm, instances higher dressing kinds 1.00 higher.  Slaughter bulls not well tested.

Pratt Livestock Feeder Cattle Auction - Pratt, KS
Receipts: 2475         Last Week: 3428             Last Year: 1801
Compared with last week:  feeder steers 700-900 lbs steady to 3.00 lower, 900-1050 lbs 5.00-10.00 lower in a limited supply of Medium and Large 1; heifers 700-1000 lbs steady to 3.00 lower, 800-900 lbs mostly steady. Steer and heifers not enough for a market test, few sales steady; In a limited test slaughter cows steady to firm, bulls steady.

Denison Wtd Avg Feeder Cattle Auction - Denison IA
Receipts:     Today:   1753
Trends: No market comparison due to no sale the past two weeks.

Valentine Livestock Auction Market - Valentine NE
Receipts:  2661    Last Week:  2895    Year Ago:  3970
Compared to last week steers over 900 lbs sold steady to 3.00 lower and 800 lbs heifers sold 3.00 lower on a thin test.

Tri-State Livestock Auction Market - McCook NE
Receipts:  1000    Last Week:  450    Year Ago:  0
Not enough to show a comparison to last week.

Clovis Livestock Auction - Clovis NM
Receipts:  1517               Week Ago:  928            Year Ago:  1780
Compared to last week:  Feeder steers under 600 lbs unevenly steady, over 600 lbs mostly 5.00 lower.  Heifers unevenly steady to weak, except a few 700-720 lb guaranteed open 3.00 higher.  Slaughter cows and bulls 2.00-3.00 lower.

Mitchell Livestock Wtd Avg Report - Mitchell SD
Receipts:  4807    Two Weeks Ago:  3015    Year Ago:  3218
Compared to two weeks ago:  Feeder steers 750-900 lbs4.00 to 7.00 lower, other weights not well compared.Feeder heifers 700-750 lbs 1.00 to 2.00 lower, 800-900lbs 3.00 to 7.00 lower.

Direct Sales of Feeder & Stocker Cattle:

AZ-CA-NV Weekly Feeder Cattle Review (Fri)
Confirmed: 0 

Colorado Direct Feeder Cattle Report (Fri)
Receipts:  1,160     Last Week:  3,303     Last Year:  1,081 
Compared to last week:  No current trades available to test the market this week. 

Eastern Cornbelt Direct Feeder Cattle Summary (Fri)
Reported sales this week:  492    Last Week: 0    Last year: 186
Compared to last week:  No trend available for feeder steers or heifers due to limited sales last week.

Georgia Direct Cattle Summary (Fri)
Confirmed sales on 1,734 head.

IA-South MN Direct Feeder Cattle Weekly (Mon)
Receipts:  0    Last Week:  0    Last Year:  63
Compared to last week:  Feeder cattle and calves not established this week. 

Kansas Direct Feeder Cattle Summary (Fri)
Receipts:  4120    Last Week:  3510    Year Ago:  2448
Compared with last week: Steers and heifers steady, with most of the cattle trading early in the week.

Montana Direct Feeder Cattle Wtd Avg (Fri)
Receipts:  0    Last Week: 765     Year Ago:  350
Compared to last week:  Not enough comparable sales on feeder steers or heifers for a market trend.

New Mexico Feeder Cattle Report (Mon)
Receipts:  600    Last Week:  1000    Year Ago:  15000
Compared to last week:  Feeder steers were steady to 2.00 lower on a very light test. Heifers were not well tested.

Northwest Wtd Avg Direct Feeder Cattle Report (Fri)
Receipts:  1543    Last Week:  5900    Year Ago:  2650
Compared to last Friday, feeder cattle 2.00-5.00 lower.

Oklahoma Direct Feeder Cattle (Fri)
Receipts: 3,094        Last Week 3,246        Last Year 2,830 
Compared to last week:  Feeder steers and heifers traded mostly steady to weak where comparable sales were noted. 

South Dakota Direct Feeder Cattle Summary (Fri)
Receipts: 0    Last Week:  1,470     Last Year:  57
Compared to last week:  No trend available for feeder steers or heifers.

Texas Direct Feeder Cattle (Fri)
Confirmed:  12,700     Last Week: 20,100     Last Year: 37,600
Compared to last week current FOB feeder steers and heifers were mostly steady to 2.00 lower but instances 3.00 to 7.00 lower late in the week. 

WY, Western NE & Western Dakotas Direct Feeder Cattle Wtd Avg (Fri)
Receipts: 810    Week Ago:  7,320     Year Ago:  775 
Compared to last week current 900 lbs steers sold 7.00 lower on a thin test.

Weekly Auction Summaries:
 

  • Reported on Friday for current week.
  • Reported on Monday for previous week.
  • .
    .

    .
    Representative Sales of Cow & Pairs:
    .
    • Ericson, N
      • Bred Cows: Medium and Large 1 AI Heifers 895-900 lbs 2265.00-2275.00, clean-up Heifers 843 Lbs 2220.00-2240.00; Fall Bred Cows Medium-Large 1: Middle Aged 1266 lbs. 2000.00, 1445-1500 lbs 2260.00-2325.00. 
      • Pairs: Fall Pairs Medium to Large 1: Young 1097-1334 lbs 100-200 lbs calves 2260.00-2850.00; Middle Aged 1499-1593 lbs 100-200 lbs calves 2750.00-2800.00; Short Solid Mouth 1422-1691 lbs 100-200 lbs calves 2400.00-2610.00; Broken Mouth 1379-1465 lbs 100-200 lbs calves 2350.00-2400.00.
    • Joplin, MO
      • Bred Cows:  Medium and Large 1-2  2-6 yrs 950-1365 lbs 2nd-3rd stage 1800.00-2550.00, 1st stage several 1020-1300 lbs 1800.00; short solid mouth to aged 3rd stage 1125-1325 lbs 1300.00-1600.00.  Large 1-2  5-7 yrs 1st stage pkg. 1450 lbs 1800.00; 7 yrs to aged 3rd stage 1400-1580 lbs 1605.00-2000.00.  Medium 1-2  2-5 yrs 1st and 2nd stage 890-1020 lbs 1500.00-1575.00. 
      • Pairs:  Medium and Large 1-2  2-4 yrs 850-1170 lbs w/145-325 lb calves and a few rebred 2600.00-2700.00, couple 1050-1355 lb cows w/newborn calves 1950.00. 
    • West Plains, MO
      • Bred Cows:  Medium and Large 1-2 few 3-4 yrs 1200 lbs 3rd stage 2550.00.  Medium and Large 1-2  3-7 yrs 1010-1460 lbs 2nd-3rd stage 2000.00-2325.00.  Medium and Large 2  2-7 yrs 940-1395 lbs 2nd-3rd stage 1600.00-1900.00, 1st stage 1600.00-1700.00.  Short-solid to broken mouth 1026-1590 lbs 2nd-3rd stage 1450.00-1800.00.  Medium 1-2  2 yr to short-solid mouth 810-1300 lbs 1st-3rd stage 1300.00-1700.00. 
      • Pairs:  Medium and Large 1-2  3-5 yrs 985-1430 lbs w/100-250 lb calves 2200.00-2575.00; Short-solid mouth 965-1125 lbs w/100-200 lb calves 1750.00-2000.00.  Small 3  Pkg 4 hd 4-7 yrs 650 lbs Longhorn cross w/240 lb calves 1700.00.
    • Springfield, MO
      • Bred Cows:  Medium and Large 1-2  2 yrs to short solid 920-1365 lbs  2nd-3rd stage 2000.00-2550.00, few 1685.00-1925.00, pkg 2 yrs 2nd stage 1045 lbs 3000.00, 1st stage 850-1310 lbs 1650.00-2050.00; broken mouth to aged 2nd and 3rd stage 1230-1325 lbs 1450.00-1775.00.  Large 1-2  4-6 yrs 2nd and 3rd stage 1385-1480 lbs 2225.00-2575.00, couple pkgs 2 yrs 1110-1115 lbs 2700.00-3125.00, 1st stage 1380-1590 lbs 1800.00-2250.00; 7 yrs to aged 2nd and 3rd stage 1380-1555 lbs 1730.00-2200.00.  Medium 1-2  2-7 yrs 2nd and 3rd stage 860-1000 lbs 1875.00-2175.00. 
      • Pairs:  Medium and Large 1-2  2-7 yrs 940-1355 lbs w/160-560 lb calves and all rebred 2925.00-3275.00; several pkgs. 6 yrs to short solid mouth 1095-1305 lbs w/baby to 370 lb calves 2225.00-2675.00; broken mouth pkg. 1100 lb cows w/165-350 lb calves rebred 1st stage 2150.00, pkg. short solid mouth to aged 1110 lbs w/390-460 lb calves rebred 2nd stage 2825.00.  Large 1-2  pkg 7 yrs to short solid mouth 1520 lbs w/400-500 lb calves all rebred 2925.00. 
    • Oklahoma City, OK
      • Bred Cows:  Medium and Large 1-2  2-7 yrs 1075-1275 lbs 4-6 months 2225.00-2550.00.  Medium and Large 2  2-7 yrs 850-1275 lbs 2-7 months 1800.00-2125.00; 8-10 yrs 1100-1400 lbs 2-7 months 1575.00-2000.00. 
      • Pairs: Medium and Large 1-2  2-3 yrs 975-1000 lbs w/50-150 lb calves 2400.00-2750.00.
    .

    .
    Bred Cows & Heifers in 2nd & 3rd Stages of Pregnancy:
    .
    Insufficient sales data for viable averages.
    .
    .

    .
    Canadian Cattle:
    .
    Alberta Beef Producers:  AAlberta direct cattle sales so far this week have seen light trade develop with dressed sales steady to 2.00 lower than the previous week. Tentatively cash to futures basis levels did strengthen and remain stronger than the five year historical average. Cattle that sold this week were still being scheduled for delivery during the first half of September.
    .
    Canadian Weekly Cattle Report

    Fed cattle steady

    • Weighted average steer prices were $184.90 per hundredweight, about 50 cents higher than the previous week and heifers were $183.23, about $1 higher.
    • Most of the trade was dressed at $309 per cwt. delivered.
    • Summer lows may be behind us.
    • Most of the trade was conducted on a forward or formula pricing basis and cash trade was thin. U.S. bidders supported the market but no business was completed.
    • The cash-to-futures basis strengthened modestly to -$10.76 but seasonally it remains weak.
    • Western Canadian fed slaughter for the holiday week ending Aug. 8 fell eight percent to 30,656 head.
    • Weekly exports to Aug. 1 fell nine percent to 3,900 head.
    • The cash market will continue thin as most market-ready cattle have been contracted or formula priced.
    • The fed basis usually weakens during the third quarter so little improvement is expected. This should improve U.S. buyer interest.
    • U.S. fed trade volumes were thin last week. Live fed cattle appeared to be about $1 higher live and $2 higher dressed in the north.
    • Tyson Foods Inc. on Aug.14 said it is permanently ceasing beef production at its Denison, Iowa, plant because of the shortage of cattle.
    Cows rally
    • Slaughter is running about 875 head per week behind last year.
    • D1, D2 cows ranged $134-$148 to average $141.21, up $1.28.
    • D3 cows ranged $120-$136 to average $128.75
    • Slaughter bulls were $172.50, up $3.46, which is a new record high. It is not uncommon to see bulls post highs during August. Average D1, D2 cow prices could rally to $145 before seasonal fall pressure sets in.
    • Yearlings set record
    • Yearling steers and heifers weighing more than 800 pounds established new highs, with steers 800-900 lb. averaging $259 and those heavier than 900 lb. at $247.
    • U.S. buyers are showing interest on feeder heifers and western Canadian feedlots are aggressive on yearling steers.
    • Steers 800-900 lb. are trading $41 per cwt. higher than last year, while heifers are $51 higher.
    • Heifers 850 lb. were about $11 less than their steer counterparts, and within pennies of the narrowest steer-heifer price spread this year.
    • Annual price highs for 850 lb. steers tend to be set in either August or October.
    • Steer and heifer calves for fall delivery saw generally steady prices. There appears to be a premium for yearlings coming off grass over those fed a dry lot ration.
    • With recent rains across the Prairies, some yearlings are being turned back onto pasture. Cow-calf pairs traded at $2,200 to $3,750.
    Western Canada on feed
    • The number of cattle in feedlots in Alberta and Saskatchewan was 674,572, steady with last year at the same time and three percent more than the five-year average.
    • It was the first time in 11 months that inventory was steady with the year-ago number.
    • Placements in July were 59,669, up 79 percent over last year at the same time when placements were at a record low.
    • Marketings in July were 131,901, the largest this year but down eight percent from last year at the same time.
    Beef rallies
    • U.S. beef cutout values surged sharply higher with generally good demand on a light to moderate offering. Choice cutout was US$245.09, up almost $10, and Select was $235.13, up $6.34.
    • Wholesalers were aggressively topping up middle and end cut inventories for the Labour Day weekend.
    • Canadian cutout values were not available.
    This cattle market information is from the weekly report from CanFax, a division of the Canadian Cattlemen’s Association.
    .

    .
    Canadian Cattle Prices:
    Prices have been converted to U.S. $/CWT.  Grades changed to approximate U.S. equivalents
    Exchange Rate: Canadian dollar equivalent to $0.7683 U.S. dollars
    .
    Prices for the week ending August 14th:
    .
    .
    .
    .

    .
    August Cattle on Feed Report

    United States Cattle on Feed Up 3 Percent

    • Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.0 million head on August 1, 2015. The inventory was 3 percent above August 1, 2014.
    • Placements in feedlots during July totaled 1.55 million head, 1 percent below 2014. Net placements were 1.49 million head. During July, placements of cattle and calves weighing less than 600 pounds were 365,000 head, 600-699 pounds were 235,000 head, 700-799 pounds were 327,000 head, and 800 pounds and greater were 620,000 head. Placements are the lowest for July since the series began in 1996.
    • Marketings of fed cattle during July totaled 1.73 million head, 3 percent below 2014. Marketings are the lowest for July since the series began in 1996.
    • Other disappearance totaled 56,000 head during July, 11 percent below 2014.

    Cattle on Feed Inventory in 1,000+ Capacity Feedlots as of August 1st
    Millions of Head
    .

    .
    Number of Cattle Placed on Feed in 1,000+ Capacity Feedlots in July
    Millions of Head
    .

    .
    Number of Cattle Marketed from 1,000+ Capacity Feedlots in July
    Millions of Head
    .

    .
    Cattle on Feed by State as of August 1st
    .
    .
    .

    .
    Connecting the Consumer & Producer:
    .
    Time was when the cattle operators in the live animal sectors gave little to no thought to the needs of the consumer. They always wanted to parade under the banner of delivering a quality beef product but the reality was they really were primarily concerned with the highest dollar transfer price available in the marketplace and little more.

    Those times are gone and in today’s operating environment those producers ignoring or attaching no importance to consumer needs will find themselves out of touch and at risk to seeing beef vulnerable to a declining demand curve. The signals are there for all beef producers to see and the evidence is overwhelming. Consumers want to know more about how beef is produced and who produced it. The challenge facing the industry is rebuilding market share as supplies of cattle increase thus preventing the price crashes of the past.

    The starting point and an idea rejected by much of the beef industry is mandatory ID of cattle. As in any product sold to consumers, it is necessary to order to establish accountability to know the ownership chain of an animal. This doesn’t mean an ecoli event would trigger a legal action against a producer. Once the animal is processed, the changed form of the beef removes legal liability of the live animal producers. It simple provides the architecture for building databases to more closely tailor the needs of the consumer to the actions of the producer. RFID chips for the ear are now available for $.50-.75 cents or little more than a plastic tag. The volunteer programs of the past are a meaningless tool to the future.

    Demand for beef does not improve on price alone. Beef must compete in the marketplace with all the foods that have a story behind them and the proper story for beef will help the industry revive the lost demand caused by cattle shortages of the past few years. Beef will need to move from a commodity only product to a transparent process -- open to scrutiny and advancing those traits in a food product important to consumers. Foremost among those concerns is food safety and traceback.

    Associated with food safety and currently the fastest growing segment of beef production with consumer preferences is “natural” or “organic”. Producers can qualify for premiums of $150-$350 dollars/head for cattle produced with well defined standards of antibiotics and hormone use. These range from Never/Never to last 100 days and other variants. Locavores are paying premiums for cattle raised close to the market where the beef is sold. Fast food restaurants are pulling in producers to join with them in agreeing to humane treatment of the animals and quality controlled production practices. All of these efforts booster consumer confidence in beef -- both from a food safety standpoint and quality control.

    Of course there is never a substitute for a consistent and reliable beef product. Producers need not respond to every consumer whim and some are impractical. It is important to be responsive. Processors are building more and more special beef programs and each must be auditable and linked to a producer action. Getting the consumer/producer link right will be an important step towards rebuilding beef as the preferred centerpiece of the consumer's plate. 

    Ag Center Cattle Report

    .

    .

    Prices from a Wal-Mart Super Center -- Wal-Mart is the world's largest grocery retailer.
    .

    .
    Heavier Cattle Partially Offset Declines in Cattle Slaughter:
    .
    USDA reduced the second-quarter beef production forecast due to lighter than expected steer and heifer slaughter during May and June. Third-quarter 2015 beef production is forecast to reach 6.250 billion pounds, approximately 1 percent higher than a year ago. Fourth-quarter production is expected to be 6.025 billion pounds, about even with fourth-quarter 2014. Total commercial beef production for 2015 is projected to reach 23.824 billion pounds, down 1.8 percent relative to 2014. Cattle feeders have partially offset reductions in steer and heifer slaughter by feeding live cattle to heavier weights.

    The combination of heavier cattle entering feedlots due to favorable pasture conditions, extended periods of cattle on feed, and a larger proportion of steers in the slaughter mix as opposed to heifers has resulted in heavier average dressed cattle weights. Despite the recent setbacks in the live cattle markets, cattlemen remain motivated to raise cattle to heavier weights as a result of moderate feed prices and historically strong cattle prices. As seen in the figure below, dressed weights typically reach their seasonal lows in the second quarter before trending heavier the last half of the calendar year. However, this year, dressed cattle weights have not exhibited a normal seasonal decline and have remained relatively steady at 814 pounds during the second quarter. Third- and fourth-quarter average dressed weights are expected to be record-heavy at 824 pounds and 829 pounds, respectively. The annual average dressed weight for live cattle in 2015 is expected to reach 820 pounds, approximately 17 pounds heavier than the previous year.

    Wholesale beef prices rebounded in early July, albeit modestly, after experiencing sharp declines in late May and early June. The modest advance in beef prices is more than likely tied to strong buying interest for processing beef and popular grilling items prior to the July 4th holiday, combined with smaller than expected weekly fed cattle slaughter numbers. However, wholesale beef prices declined sharply following the July 4th holiday. Packers’ margins have been squeezed, and packers are expected to remain prudent when considering the number of animals they are willing to process each week as the year continues. Wholesale beef prices are expected to moderate through the remainder of July as interest in processing loses momentum after the July-4th holiday and consumers consider eating more affordably priced pork and chicken products. Packers are expected to remain diligent in holding weekly kills at relatively low levels in order to underpin wholesale beef prices. 

    Kenneth Mathews & Mildred Haley -- USDA 

    .

    .
    Photo of the Week:
    .
  • Angus Bred Heifers... Southwest KS*^
  • .

    .
    Shootin' the Bull Weekly Analysis:
    .
    In my opinion, what was anticipated is now coming to fruition.  More so in the feeders than fats, but both still the same.  So, now what happens?  Well, with fats, I would anticipate the October contract finding some footing just north of $140.00.  There is a strong upward seasonal for October fats towards the end of August.  Most agree that the number of cattle on feed would dwindle were it not for the reduction in kills. I also noticed that month over month cold storage was down.  Although significantly higher year over year, the month over month suggests maybe storage was tapped into to keep packers from tipping the scales on price.   So, I am going to go from being bearish to a neutral stance for a little while.  A trade down to $140.00 October won't surprise me, but it may not spur any action either. 

    Like the fats, what was anticipated is now coming to fruition in the feeder market.  Feeder cattle remain on the front burner as it is perceived this years fall scenario to be horrible.  Every day that one waits to sell, they are receiving a lower price.  The longer you wait, the cheaper they are.  With contract low in the cross hair, I would anticipate traders pushing feeders lower. How much, is now the question.  Remember that basis is elastic.  The back months are now over $10.00 to $15.00 lower than the index.  Even though I continue to anticipate a lower price, there could be one whale of a snap back on the futures if basis is perceived too wide.  A lower trade on Monday may lead to some profit taking.  What ever transpires, do not anticipate any settling down of prices.  Volatility is anticipated to increase. 

    If traders are able to shake off the deflationary environment, the collapse in equities, and oil prices having printed a 3 handle today, maybe feeders could put on a day or two rally.  I urge producers to be exceptionally cautious about hedging cattle now that this large of a price break has materialized.  Especially so in the options.  Option premiums are swollen, and combined with the significance of the decline, does not provide a very good hedge. One may be better to just sweat it out if nothing has been done yet.  This is now one of the damned if you do, damned if you don't situations.  Short futures or buy puts and a dead cat bounce runs over you.  Don't do anything and prices continue to spiral lower.  With the move anticipated now materializing, I would attempt to get as many cattle sold as possible and relinquish hedge positions instantly upon confirmation of sale. 

    Corn traded lower this week.  This is almost like making excuses for corn, but it appears that corn really does want to move higher, just every time it gets started something comes out of the blue to knock it back.  Regardless, I am not bearish corn.  I made the recommendation earlier this week to buy December of '15 & '16 corn with sell stops at $3.67 December '15 and $3.88 December '16.  This was a sales solicitation.  I anticipate corn to climb a wall of worry.  It is steep, but I anticipate corn to have a good toe hold.

    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.

    .

    .
    August 21st: USDA Cold Storage Report:
    .
    • Total red meat supplies in freezers were down 1 percent from the previous month but up 21 percent from last year. 
      • Total pounds of beef in freezers were down 4 percent from the previous month but up 24 percent from last year. 
      • Frozen pork supplies were up slightly from the previous month and up 19 percent from last year. 
      • Stocks of pork bellies were down 47 percent from last month and down 63 percent from last year.
    • Total frozen poultry supplies on July 31, 2015 were up 6 percent from the previous month and up 13 percent from a year ago.
      • Total stocks of chicken were up 6 percent from the previous month and up 22 percent from last year. 
      • Total pounds of turkey in freezers were up 7 percent from last month and up 1 percent from July 31, 2014.
    .

    .
    Margin between the Choice Boxed Beef Cutout & Feeder Steers:
    .
    5 Year Average: $42.35 -- This Week: $30.74

    .

    .
    Out of Kilter:
    .
    A good way to determine if something is, “going on” in a market is by noticing when market relationships are out of kilter. Cattle and grains typically have a positive correlation. They tend to move in tandem. Moderately increase the price of corn and the cattle will follow suit. The opposite is also true as the cost of feed declines, so does the cost of production. However, when this relationship breaks down, its because one market can't keep pace or pass on the costs of the other. 

    That is what occurred in the spring of 2012 with cattle and corn. The price of feed exceeded the livestock market's ability to pass on the costs. Over the 2013 summer months, the gap was erased and corn went "Out of Kilter" last fall.  A correction started in January but ran out of steam in view of surging cattle prices and plummeting corn prices.

    Normally, the value of 25 bushels of corn is approximately equal to the price per cwt. for feeder steers.

    .
    5 Year Moving Average:
    .
    .

    .
    Crude/Cattle Correlation:
    .
    The chart below shows a fairly consistent correlation between the price for a barrel of crude oil and the per cwt. price for slaughter cattle.  Since it is unlikely the price of cattle affects the price of oil on the world market, it might be assumed the price of crude oil affects the price of cattle, but that is unlikely as well.  It is more likely that economic factors affecting demand for crude oil have a similar effect on demand for beef.

    Accordingly, in the absence of geo/political events disrupting or distorting oil supply, since price trends occur slightly sooner in the crude oil market, crude oil has been a good indicator of the direction of near term cattle prices. However, with increased supplies of crude oil and decreased supplies of slaughter cattle, an "Out of Kilter" situation between the two commodities has developed.

    .
    5 Year Moving Average:
    .
    .

    .
    Canadian Cattle Inventory:
    .
    The cattle inventory in Canada as of July 1 was estimated at 13.005 million head, 2.1% lower than the previous year. The lower inventories were not a surprise considering that the January 1count showed total inventories down 2.5% from the previous year. The
    decline in Canadian inventories comes at a time when the cattle cycle in the US has turned a corner. So far, it has been particularly difficult for Canadian producers to rebuild the herd for a number of reasons. Sharply higher cattle prices in North America and a strong US currency have limited US beef exports into Canada and have encouraged Canadian producers to ship more feeder cattle and breeding animals to the US. 

    Drought in the Canadian prairies this summer also prevented Canadian producers from retaining more heifers. Some of the heifers that would have been retained in the Canadian beef cow herd likely were sold into the US where pasture conditions last year and this year have been well above average. As a result, the Canadian beef cow herd as of July 1 was 3.792 million head, 134,400 head (-3.4%) lower than a year ago. Heifers retained for beef cow replacements were down 0.6% while heifers retained for dairy cow replacement declined 3.1%. 

    The decline in the beef cow herd and fewer heifers held back for breeding stock replacement imply a smaller calf crop in 2015 and 2016. Statstcs Canada did not provide an estimate for the calf crop in 2015 but we would expect the calf crop this year to be down about 2.7-2.9% compared to a year ago. The calving ratio was quite high last year as strong feeder prices provided cow-calf operators with an incentive to better manage the herd. Lower feed costs also may have been a contributing factor. We expect the calving ratio to be high this year as well but it still is a wild card. A calving ratio closer to the long term trend would imply an even smaller calf crop in 2015. 

    Currency markets and pasture conditions remain two key drivers for the Canadian cattle industry going forward. Current conditions certainly favor US feedlots and processors, who are able to outbid their Canadian counterparts. The result could be further reduction in Canadian packing capacity and higher beef prices for Canadian consumers. Canada also will likely import more beef from Australia and New Zealand and we could also see some Brazilian and Argentine fresh beef going there although their lack of country specific TRQ will limit overall volumes. 

    CME Group

    .

    .
    Slaughter Cows & Bulls:
    .
    Slaughter cows 2.00-4.00 lower.  Slaughter bulls 3.00-5.00 lower. 

    USDA's Cutter cow carcass cut-out value Friday afternoon was 222.54 -- Down 1.75 from last Friday.

                       %Lean      Weight        Montana    Oklahoma           Alabama 
    Breakers   75-80%    1100-1600     n/a         106.00-113.00    100.00-103.00
    Boners       80-85%   1000-1450     n/a         107.00-116.00    106.00-111.00
    Lean          85-90%    1000-1300     n/a         105.00-114.00      96.00-101.00
    Bulls           88-92%   1300-2500     n/a         130.00-137.50    127.00-132.00

                           Confirmed    Week Ago    Year Ago   Week to Date   Week Ago    Year Ago
    NATIONAL        7,270            5,553           6,802             33,045            32,120        30,181
    S CENTRAL     1,971            1,506           1,386               8,801              8,867           6,410
    N CENTRAL     1,122               423              516               3,209               2,556           2,216
    EAST                 1,983            1,725          1,893                9,740              8,921           9,679
    WEST                1,235               722          1,902                6,168              5,899           6,158
    MIDWEST            959            1,177          1,105                5,127              5,877           5,718

     

    .
    Est. Weekly Meat Production Under Federal Inspection:
    .
    Total red meat production under Federal inspection for the week ending Saturday, August 22, 2015 was estimated at 916.2 million lbs. according to the U.S.Department of Agriculture's Marketing Service. This was 0.4 percent higher than a week ago and 0.3 percent higher than a year ago.  Cumulative meat production for the year to date was 0.9 percent higher compared to the previous year.
    .

    .
    Weekly Hay Reports: "Click" on links for detailed report
    .
    .
    Weekly Feedstuffs Market Review:
    .
    The USDA Market News Service reports feed ingredient prices for the week ending August 18, were mixed. 
    • Soybean Meal was 12.10 to 22.10 lower.  Whole Cottonseed was steady to 5.00 lower. Canola Meal was 40 cents to 27.40 lower.  Linseed Meal was 20.00 to 30.00 lower.  Sunflower Meal was 5.00 to 10.00 lower. 
    • Cottonseed Meal was steady to 30.00 lower. 
    • Crude Soybean Oil was 176 to 284 points lower. Crude Corn Oil was steady. 
    • Ruminant Meat and Bone Meal was steady to 20.00 lower. Ruminant Blood Meal was steady to 150.00 lower. Feather Meal was steady to 25.00 lower.  Menhaden Fishmeal was steady. 
    • Corn Hominy was steady. Gluten Feed was steady to 5.00 higher.  Corn Gluten Meal was steady to 7.00 lower. 
    • Distillers Dried Grain were mixed 7.50 lower to 5.00 higher, mostly steady to 5.00 lower. 
    • Wheat middlings were mixed, 10.00 lower to 8.00 higher mostly steady to 5.00 higher. Wheat millrun was mixed, 5.00 lower to 8.00 higher.

    .
    Bullish/Bearish Consensus:
    .
    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 line in 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.

    .

    .
    Bullish/Bearish Consensus - Cattle
    Last Updated: August 18th
    .
    .

    .
    Bullish/Bearish Consensus - Corn
    Last Updated: August 18th
    .
    .

    .
    Economic News:
    .
    Stocks fall sharply on worries about China-led slowdown: The major benchmarks experienced their largest weekly declines since 2011 as worries grew that China's economic slowdown would weigh heavily on global growth and commodity prices. A plunge in some emerging markets currencies also raised fears of a global round of competitive devaluations, which would drag further on the profits and competitiveness of U.S. multinationals. All of the benchmarks moved into negative territory for the year to date. By the end of the week, the Dow Jones Industrial Average and the small-cap Russell 2000 Index had declined by more than 10% from their highs, putting them in what is commonly considered correction territory.

    There are worries that China's devaluation will start a trend: U.S. stocks experienced most of their selling pressure at the end of the week. Several factors appeared to be driving the selling, although most were traceable back to China's decision the previous week to devalue its currency by loosening its peg to the U.S. dollar. Fears grew that China's move reflected a steeper slowdown in the country's once-rapid growth than previously acknowledged -- concerns that deepened on Friday, following news that Chinese factories were operating at their slowest pace since the financial crisis of 2008 - 2009. Steep drops in other emerging markets currencies also weighed on sentiment. The tenge, the currency of Russia's southern neighbor Kazakhstan, tumbled precipitously after it removed its dollar peg entirely, but the floating currencies of other nations fell as well.

    Drop in commodity prices may be more durable and profound: The week's other major global financial disruption came from the ongoing drop in oil prices, which reached six-year lows. The drop appeared to be partly in response to the slowdown in Chinese demand, but supply concerns also took a toll. Stockpiles of U.S. crude continued to rise, leading to some concerns that major storage facilities would soon run out of room. Meanwhile, Saudi Arabian production topped the peak it had established in 1980, and traders braced themselves for the arrival of significant new supplies from Iran once sanctions are lifted. Prices for other commodities, such as copper, followed oil lower, weighing heavily on the materials sector. Analysts and portfolio managers believe that the global economy has entered a long-term cycle of declining commodity prices that will be exacerbated by declining production costs.

    Upside of falling commodity prices seen in data but fails to reverse sentiment: The upside of lower energy and commodity prices for consumers was also evident during the week, although it appeared to provide little comfort to investors. Economists have been looking for lower gasoline prices to stimulate spending, and several prominent retailers reported better-than-expected earnings. The trend was particularly pronounced among building supply stores, which are also benefiting from continued strengthening in the housing sector. Reports showed July sales of both new and existing homes reaching their highest pace in eight years in July. 

    Fed uncertainty adds to worries:  Another source of volatility for the market during the week was the deepening uncertainty over when the Federal Reserve will begin to raise interest rates. Many economists agreed that the darkening global economic backdrop increased the possibility that the Fed will wait past its next meeting in September to begin raising rates. The minutes from the Fed's July policy meeting also appeared to give temporary relief to markets after their release on Wednesday, as they indicated that policymakers remained concerned about the low level of inflation.  It is expected that continued improvement in the labor market will be the decisive factor in the first rate hike, however.

    .
    .
    .

    .
    "Click Here" to view a Slide Show of Drought Monitor maps for the last 12 weeks
    .
    .
    .

    .
    Looking Ahead:
    .
    • During the next 6-10 days, the probability of cooler than normal temperatures are high in the Ohio and Tennessee River Valley’s extending into the Great Lakes and Midwest. Chances are likely that the rest of the country will experience warmer than normal temperatures, especially in the Northeast, Southeast, and Southwest.
    • Over the same period, precipitation associated with the large system centered over Wisconsin will move through the Great Lakes area. Further south, the precipitation will slowly move eastward and dissipate as the low pressure moves into Canada. Another, less powerful and dryer system will follow producing the heaviest precipitation in the Midwest. Ridging continues to hold its grip in the West while monsoonal precipitation may bring light drought relief in the Southwest
    .dm

    .d



    .

    .
    Feedyard Closeouts: Profit/(Loss)
    .
    • Typical closeout for steers sold this week & hedged when placed on feed: ($97.48)
    • Typical closeout for un-hedged steers sold this week: ($172.25)
    • Projected closeout based on the futures & estimated Cost of Gain for steers placed on feed this week: ($157.46)
    .
    .

    .
    Slaughter Cattle:
    .
    Friday negotiated cash trade and demand was moderate in Kansas with live sales ranging mostly from 146.00-148.00 with the bulk of sales at 147.00, 3.00 lower compared to last week. In the Texas Panhandle a few live sales sold 1.00 lower compared to Wednesday, at 147.00. Trade was mostly inactive on light demand in all other feeding regions. In the Northern Plains on Wednesday live sales sold at 149.00 with dressed sales in Nebraska at 232.00-234.00. In the Western Cornbelt on Wednesday live sales sold from 146.00-147.00 with dressed sales from 232.00-234.00.

    Livestock Slaughter under Federal Inspection:
                                     CATTLE    CALVES       HOGS         SHEEP
    Friday        (est)       105,000        1,000           406,000            6,000
    Week ago (est)       103,000        1,000           404,000            6,000
    Year ago (act)         116,000         2,000          343,000            6,000
    Week to date (est)  534,000        8,000       2,094,000           39,000
    Last Week (est)      532,000         8,000       2,105,000          36,000
    Last Year (act)         572,000      10,000       1,971,000          39,000

    Saturday    (est)           6,000         0                 132,000         0
    Week ago (est)           8,000         0                  108,000         0
    Year ago (act)           23,000         0                    31,000         0
    Week to date (est)  540,000         8,000       2,226,000         39,000
    Last Week (est)      540,000          8,000       2,213,000         36,000
    Last Year* (act)       596,000       10,000       2,002,000          39,000
    2015 YTD           18,045,000     276,000    72,139,000    1,273,000
    2014 *YTD         19,400,000     384,000     66,947,000    1,365,000
    Percent change     -7.0%          -28.2%           7.8%              -6.7%

    Negotiated prices paid for Slaughter Steers and Heifers:
    Live basis               Steers                                      Heifers
    Over 80% Choice    145.00-148.00 avg 146.61   147.00-147.50 avg 147.20
    65 - 80% Choice     147.00-148.00 avg 147.40   145.00-147.50 avg 146.72
    35 - 65% Choice     145.00-147.00 avg 146.80   147.00-148.00 avg 147.09
    0 - 35% Choice             -                                                     -
    Total all grades     145.00-148.00 avg 146.91   145.00-148.00 avg 146.92

    Dressed basis
    Over 80% Choice            -                                                  -
    65 - 80% Choice     235.00-235.00 avg 235.00   235.00-235.00 avg 235.00
    35 - 65% Choice     235.00-235.00 avg 235.00   235.00-235.00 avg 235.00
    0 - 35% Choice             -                                                     -
    Total all grades     235.00-235.00 avg 235.00   235.00-235.00 avg 235.00

    .

    .
    .

    .
    National Grain Summary:
    .
    Grain and soybean bids were mixed for the week.  Corn found support from the lower corn yield estimates in the eastern corn-belt as the Pro-Farmer tour continues this week across the Midwest.  Soybeans closed lower on good weather conditions as temperatures have cooled down and rain fell across the Midwest beneficial for filling pods.  Wheat was lower on expected spring wheat harvest progress.  The Pro-Farmer tour had results in Ohio at 148.4 bpa compared to the 3 year average of 154.8 bpa and in South Dakota with 165.9 bpa compared to the 3 year average of 129.6 bpa.  Illinois corn crop was estimated at 171.6 bpa near the same as USDA’s estimate.  The tour continues through Iowa and Minnesota.  The NOPA Crush Report for July came in at 145.23 million bushels, which was more than expected and a record high for the month.  Soybean oil stocks came in more than expected at 1.62 billion pounds.
    Corn Futures Summary: CBOT corn futures were neutral Friday morning but closed lower. The macro markets largely affected the grain and oilseed trade this week. The Dollar was down sharply and gold surged this week. Crude oil fell to 6-year lows and the DJIA fell 358 points Thursday, or 2.1%, making it the worst day of the year for the Dow. The Dow plunged another 2.3% Friday before the close. The Chinese market has fallen 11.5% this week. The trade expects the corn crop condition to improve in Monday’s report. September corn futures dropped 5.75 cents to $3.6525/bushel Friday, while December lost 5.25 cents to $3.7725.

    Soybean Futures Summary: The soy complex pulled back heavily Friday. The weather outlook for finishing the soybean crop does not show any troubling signs, despite news Thursday that July 2015 was the hottest month ever recorded for planet earth, according to NOAA. This favorable weather and larger concerns about the health of the global economy, particularly Chinese demand, have soybeans on pace for a second straight weekly loss. Crop tours now in the southwest Minnesota region reported that yields will meet high expectations. Palm oil has fallen 13% in the last 8 weeks posting its longest weekly losing streak in 16 years. September futures fell 16.25 cents to $9.0525/bushel Friday, while September soyoil lost .62 cents to 27.36 cents/pound and September meal dropped $4 to $326.9/ton.

    Wheat Futures Summary: End-of-week consolidation and good weather kept pressure on wheat futures Friday. Statistics Canada stated their wheat crop estimate at 24.63 mmt, compared to the USDA’s August estimate of 25.6 mmt. U.S spring wheat harvest progress and crop condition ratings this week are above average and adding to the abundant supply outlook. EU wheat has fallen to three-month lows on larger than anticipated French wheat production. September CBOT wheat futures slid 6.75 cents to $4.995/bushel Friday, while Sep KC wheat fell 10 cents to $4.71/bushel, and September MWE declined 11.5 cents to $5.13.

    .

    .
    .
    .
    Five Year Moving Average - Corn & Wheat
    .
    .
    .

    .
    Your Suggestions:
    .
    Our goal is for the Weekly Market Summary to provide a condensed, yet comprehensive, overview of the week's cattle market.  If you have a suggestion that would enhance the summary, use the link below to submit your suggestion. If we implement it, we'll send you a Cattle Range Knife as a token of our appreciation.
     
  • Submit Your Suggestion

  • .
    Although the information contained in this Market Summary is from sources believed to be accurate and timely, THE CATTLE RANGE EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESSED OR IMPLIED, AS TO THE ACCURACY OF ANY OF THE CONTENT PROVIDED, OR AS TO THE FITNESS OF THE INFORMATION FOR ANY PURPOSE.
    .
    Copyright © TM - The Cattle Range - All Rights Reserved
    .