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Market Summary for the week ending May 20th:
May 20, 2016
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The Cattle Range 10 Day Market Trendline:
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Bearish:. The recent rally sparked by the upcoming Memorial Day holiday was dampened this week by the reality of increased meat production this summer, with beef leading the pack.
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.
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Market Data:
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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     188,700     44,800         1,200        234,700 
Last Week     159,000     50,100        40,100        249,200 
Last Year       168,000     29,900         6,800        204,700 

Compared to last week, steer and heifer calves early in the week sold steady to 5.00 higher, with instances up to 15.00 higher on sales that didn't get to take advantage the late last week's uptick in the market.  For the week, yearling steers and heifers traded mostly steady to 3.00 higher.  Several auctions across the North and South Plains have had steers weighing over 900 lbs in their runs the past few weeks due to the excellent weather from winter through spring.  Some of the highest prices seen this spring were perhaps this week as 2 loads of light 9 weight fancy steers in Valentine, NE sold on Thursday at 149.00-149.35.  Several strings of steers at Hub City Livestock in Aberdeen, SD and Mitchell Livestock in SD had a wtd avg on 1000-1150 lbs north of 130.00 and at Huss-Platte Valley Auction in Kearney, NE on Wednesday sold 4 loads of 1012 lbs steers at 138.50.  Replacement heifers are still in demand as a short load of 787 lb Red Angus heifers sold in West Plains, MO on Tuesday at 165.00. 

Fed cattle trade this week saw a 2.00 drop to sell at mostly 132.00 in the South Plains on moderate volume after last week's largest 5-Area cash trading week since early August 2012 and last week's estimated cattle harvest of 601,000 was the largest since w/e June 28, 2014.  Analysts are watching the steer dressed weight drop like a rock as the latest available weight is reported at 862 lbs; 42 lbs less than the first of the year and the largest drop in the same corresponding time frame since 2007. CME Feeder Cattle contracts settled the week around 1.50 higher than last Friday, while the Live Cattle contracts closed the week nearly 3.00 lower on the June contract and very uneven on the deferred contracts.  Cattle on Feed Report was released Friday afternoon with May 1st at 101 percent; Placements at 107 percent and Marketings at 101 percent with placements being above estimates and others coming in around estimates.  Auction volume this week included 61 percent weighing over 600 lbs and 41 percent heifers.

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Stocker Steers:
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Feeder Steers:
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Five Year Moving Average - Stocker Steers, Feeder Steers, & Slaughter Steers:
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Cattle Futures: Live cattle futures favored the downside at week's end and posted moderate losses for the week. Feeder cattle ended narrowly mixed for the day and a buck or two higher for the week. Futures struggled to find buyers this week, despite generally positive fundamentals. Next week the market could be headed even lower as traders respond to a negative Cattle on Feed Report and signs the product market has put in a near-term top. The Placements figure was the most negative from today's reports, which should weigh most heavily on fall and winter contracts. 
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Selected Auction Reports:
"Click" on individual auction links for complete report

Farmers & Ranchers Livestock Commission Co. - Salina KS
Receipts:  2130    Last Week:  2724    Year Ago:  2095
189Compared to last week: Feeder steers 750-900 lbs steady to 2.00 higher; 900-1000 lbs 4.00 lower; Feeder heifers 700-900 lbs firm to 2.00 higher on a light test. Steer and heifer calves a firm to higher under tone noted on a light test.

Tulia Livestock Auction - Tulia TX
Receipts:  2453    Last Week:  3211    Year Ago:  1622
Compared to last week:  Feeder steers and heifers were steady.  Trade activity and demand were moderate.  Supply consisted of mostly yearling steers and heifers Medium and Large 1-2s weighing 700 lbs and up.

Mitchell Livestock Wtd Avg Report - Mitchell SD
Receipts:  3886    Last Week:  5077    Year Ago:  3535
Compared to last week:  Feeder steers and heifers sold mostly steady to 5.00 lower.  Demand moderate to good on a moderate to active market.  Many long strings of reputation backgrounded and homeraised yearlings offered today,

Oklahoma National Stockyards - Oklahoma City OK
Receipts: 8,225   Last Monday:  7,686   Year Ago Monday: 8,713
Compared to last week:  Feeder steers and heifers 1.00-3.00 higher. Demand good for feeder cattle.  Steer and heifer calves mostly steady with moderate to good demand.

El Reno Cattle Narrative - El Reno OK
Receipts:  11,449    Last Week:  11,243    Year Ago:  8,265
Compared to last week:  Feeder steers and heifers sold steady. Steer and heifer calves not well tested due to limited comparable sales.  Demand good for feeder cattle.

Joplin Regional Stockyards Feeder Cattle Wtd Avg - Carthage MO
Receipts:  4670    Week Ago:  3739    Year Ago:  6093
Compared to last week, steer calves steady to 3.00 higher, heifer calves under 500 lbs 5.00 to 10.00 lower, over 500 lbs 1.00 to 3.00 lower, following last week's sharply higher trade.  Yearlings steady to 2.00 higher.

Toppenish, WA Livestock Auction - Toppenish WA
Receipts:  1300   Last Week:  1500    Year Ago:  1300
Compared to last Thursday at the same market: stocker and feeder cattle steady to 5.00 higher. Trade active with moderate demand. Slaughter cows and bulls steady to 2.00 higher.

Cattleman's Livestock Auction - Dalhart, TX
Cattle and Calves: 1340      Week ago: 1347      Year Ago:  1177
Compared to last week:  Feeder steers and heifers mostly steady in all weight ranges except a few packages weaned and thin kinds 2.00 higher. Slaughter cows and bulls steady.

Pratt Livestock Feeder Cattle Auction - Pratt, KS
Receipts:  4545    Last Week:  5237    Year Ago:  2750
Compared with last week: Feeder steers firm to 2.00 higher, a few reputation Fancy 6.00-8.00 higher; Feeder heifers 2.00-3.00 lower; steer and heifers calves firm in a limited test; Slaughter cows steady to 1.00 higher; slaughter bulls firm to 3.00 higher.

Clovis Livestock Auction - Clovis NM
Receipts:  2458             Week Ago:  2291              Year Ago:  1018
Compared to last week:  Feeder steers and heifers mostly 3.00-7.00 lower due to unusually cold, wet weather.  Over 700 lbs unevenly steady.  Slaughter cows and bulls 3.00-7.00 higher with quality more attractive and increased buyer attendance. Trade
active, demand good to very good.

Sioux Falls Regional Livestock wtd Avg Report - Worthing SD
Receipts:  2840    Last Week:  1035    Year Ago:  1510
Compared to last week:  Feeder steers under 750 lbs not well compared, however higher undertones noted; 750-850 lbs 6.00 to 10.00 higher, 850-950 higher undertones in narrow comparison, 950-1050 lbs steady to 2.00 higher.

Huss Platte Valley Auction - Kearney NE
Receipts:  4000    Two Weeks Ago:  3239    Year Ago:  2930
Compared to two weeks ago, steers and heifers under 700 lbs sold 10.00 to 15.00 higher. Steers over 700 lbs sold 5.00 to 9.00 higher and heifers over 700 lbs sold 5.00 to 7.00 higher.

Russell Wtd Avg Feeder Cattle Auction - Russell IA
Receipts:  2066    2 weeks ago:  1700
Compared to the sale 2 weeks ago: Feeder strs under 500 lbs. mostly 16.00-24.00 higher, feeder strs over 500 lbs. mostly 4.00-10.00 higher and feeder hfrs mostly 6.00-12.00 higher.

Valentine Livestock Auction Market - Valentine NE
Receipts:  3845  Last week: 486 Last year: 2995
No recent test of market for an accurate comparison a trend will not be given for steers or heifers.  Demand was good with several buyers today.

Tri-State Livestock Auction Market - McCook NE
Receipts:  1450    Last Week:  0    Year Ago:  1000
No comparison to last week, due to no feeder sale. Steers accounted for 68 percent and heifers 32 percent of the offering today. Demand was good on all weights of cattle.

Direct Sales of Feeder & Stocker Cattle:

AZ-CA-NV Weekly Feeder Cattle Review (Fri)
Confirmed: 0 
Compared to last week, trade inactive, demand light. Most feeders are taking a wait and see attitude.  Heifers 0 percent of total supply. Cattle weighing over 600 lbs totaled 0 percent.

Colorado Direct Feeder Cattle Report (Fri)
Receipts: 3,734        Last Week 2,183        Last Year 1,833 
Compared to last week:  No trend available for feeder steers and heifers due to limited Current FOB trades.  Demand moderate to good. Supply consisted of 100 percent over 600 lbs; 32 percent heifers.

Georgia Direct Cattle Summary (Fri)
Confirmed sales on 1,209 head; All sales 2-3 percent shrink f.o.b. feedlots or equivalent, 10 day pickup: 
Steers Medium and Large 1-2 137 head 550-600 lbs 147.75-168.50; 236 head 600-650 lbs 151.00-155.50; 66 head 750-800 lbs 142.50; 128 head 850-900 lbs 137.50-138.80;

IA-South MN Direct Feeder Cattle Weekly (Mon)
Receipts:  190     Last Week:  0     Last Year:  0
Compared to last week:  Feeder steers and heifers not established. Producers are very busy working in the fields planting beans or are just finishing.

Kansas Direct Feeder Cattle Summary (Fri)
Receipts:  3407    Last Week:  6095    Year Ago:  1452
Compared with last week: Steer and heifers firm to 3.00 higher with comparable sales. Cool, damp, rainy weather over most of the state has brought planting and silage cutting to a very 
slow pace or a standstill.

Montana Direct Feeder Cattle Wtd Avg (Fri)
Receipts: 0          Last Week: 193            Last Year: 0 
Compared to last week: Feeder steers and heifers not established.  Much of the winter/spring run of feeder cattle is complete in Montana.  Supply consisted of 0 percent over 600 lbs and 0 percent heifers.

New Mexico Feeder Cattle Report (Mon)
Receipts:  1945    Last Week:  127    Year Ago:  500
Compared to last week:  Not enough comparable sales of feeder steers or heifers for a market trend.  Trade activity was slow on light to moderate demand.

Northwest Wtd Avg Direct Feeder Cattle Report (Fri)
Receipts:  5200    Last Week:  3600    Year Ago:  2500
Compared to last Friday, feeder cattle firm to 9.00 higher. Trade moderate. Demand moderate to good. The feeder supply included 89 percent steers and 11 percent heifers.

Oklahoma Direct Feeder Cattle (Fri)
Receipts: 3,536        Last Week 4,452        Last Year 2,976 
Compared to last week:  Feeder steers traded 5.00 to 8.00 higher Feeder heifers sold mostly 4.00-6.00 higher on limited comparable sales. Demand good. 

South Dakota Direct Feeder Cattle Summary (Fri)
Compared to last week:  Feeder steers and heifers not established. 
Trade at a standstill due to drier weather allowing producers to gear up for planting season.  Supply consisted of 0 percent over 600 lbs and 0 percent heifers. 

Weekly Auction Summaries:
 

  • Reported on Friday for current week.
  • Reported on Monday for previous week.
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    Representative Sales of Cow & Pairs:
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    • Torrington, WY
      • Bred Cows:  Medium and Large 1 per head basis Heifers May-June and summer calvers 995-1100 lbs 1475.00-1725.00; Young May-June Pkg 39 head 1137 lbs 1700.00; Middle Aged Solid Mouth June and July calvers Pkg 34 head 1279 lbs 1610.00; summer calvers 1120-1260 lbs 1285.00; Aged Short Solid Summer calvers 1160-1400 lbs 1110.00-1335.00; Aged Short Term Summer calvers 1190-1310 lbs 960.00-1235.00; Pkg May-June calvers 1306 lbs 1750.00.  Cow/Calf 
      • Pairs:  Medium and Large 1 Heifers 860-1020 lbs with 100-150 lb calves 1950.00-2200.00: Young 1070 lbs with 150 lb calves 2300.00: Solid Mouth 1220-1300 lbs with 200-250 lb calves 2375.00-2400.00, 1000-1040 lbs with 150 lb calves 1650.00-1800.00: Aged Short Solid 1240-1300 lbs with 200-230 lb calves 1800.00-1985.00, 1020-1140 lbs with 150 lb calves 1500.00-1525.00: Aged Short Term 1090-1300 lbs with 130-280 lb calves 1425.00-1725.00.
    • Riverton, WY
      • Bred Cows: Heifers 975-1085 lbs 1300.00-1600.00, few (late) 905-1230 lbs 825.00-1160.00; Young 1070-1525 lbs 1300.00-1735.00, few (late) 1035-1430 lbs 900.00-1200.00; Middle Aged (Short Solids) couple 1400 lbs 1275.00, individual (late) 1060.00 all per head. 
      • Cow/Calf Pairs: Heifers (package) 1050 lb heifers with 225 lb calves 2500.00, individual 1320 lbs with 85 lb calf 2300.00; Young package 1360 lb cow with 216 lb calves 2500.00, few 990-1320 lb cows with 80-250 lb calves 1400.00-1875.00; Middle Aged (Short Solids) 1020-1240 lb cows with 210-240 lb calves 1125.00-1250.00 all per head.
    • Burwell, NE
      • Bred Cows:  Medium and Large 1-2 Solid Mouth 1120-1150 lbs 3rd trimester 1575.00; Aged 1175-1200 lbs 3rd trimester 1150.00-1160.00.
      • Fall Calving Bred Cows: Medium and Large 1: Heifers 1220 lbs 1st trimester 1650.00; Solid Mouth 1140 lbs 1st trimester 2200.00. 
      • Cow/calf pairs: Medium and Large 1-2: Heifers 1070-1480 lbs with 180-215 lbs 2025.00-2475.00; Solid Mouth 1187-1300 lbs with 160-170 lbs calves 1600.00-1625.00; Short Solid Mouth 1245-1300 lbs with 160 lbs calves 1450.00-1535.00; Broken Mouth 1135-1280 lbs with 150-160 lbs calves 1275.00-1385.00. 
    • Crawford, NE
      • Bred Cows: Medium and Large 1: Bull bred heifers 1025-1180 lbs 3rd trimester 1400.00-1850.00.  3yr old to solid mouth cows 3rd trimester 1200-1525 lbs sold for 1450.00-1575.00.  Short term cows 1275-1560 lbs 3rd trimester sold for 1000.00-1400.00. 
      • Cow/calf Pairs: Medium and Large 1: Heifer pairs with 140-215 lb calves 975-1050 lbs sold for 2250.00-2520.00; 3yr old to solid mouth pairs with 225-320 lbs calves 1075-1375 sold for 2000.00-2420.00; Short solids to Short term cows with 140-240 lbs calves sold for 1200.00-1600.00. 
    • Huss, NE
      • Bred Cows:  Medium and Large 1 Solid Mouth 1325-1440 lbs 3rd stage 1460.00-1600.00. Short Solid Mouth 1325 lbs 3rd stage 1010.00.
      • Fall Bred Cows:  Medium and Large 1 All 1st stage, 3-4 yrs 995-1060 lbs 1350.00-1400.00, 1140-1180 lbs 1485.00-1850.00; Red’s 1025-1185 lbs 1560.00-1575.00.  Solid Mouth 1340-1460 lbs 1100.00-1150.00.  Short Solid Mouth 1155-1270 lbs 875.00-950.00. 
      • Cow/calf Pairs:  Medium and Large 1 Heifer Pairs 1250-1355 lbs with 200-250 lbs calves 2500.00-2710.00. 3 yrs old 1400 lbs with 100 lbs calves 2300.00.  Running Age 1400-1500 lbs with 200 lbs calves 1510.00-1750.00. 
    • El Reno, OK
      • Replacement Cows:  Medium and Large 1-2 Heifers 950-1350 lbs 5-7 months 1200.00-1600.00; 4-7 yr old 1000-1350 lbs 5-7 months 1300.00-1600.00; 4-8 yr old 1000-1400 5-8 months 950.00-1175.00. 
      • Pairs:  Medium and Large 1-2  3-4 yr old  1050-1200 lb cows w/130-160 lb calves 2450.00; 5 yr old 1050-1300 lb cows w/100-200 lb claves 1900.00-2050.00; 6-7 yr old 950-1300 lb cows w/110-185 lb calves 1600.00-1725.00.
    • Oklahoma City, OK
      • Replacement Cows:  Medium and Large 1-2  2 yr old 1150 lbs 5 months 1425.00; 4-6 yr old 1200-1450 lbs 6-7 months 1375.00-1550.00; 8-10 yr old 1100-1500 lbs 5-7 months 1000.00-1150.00; 8-10 yr old 1100-1300 lbs 3-5 months 860.00-960.00.
      • Pairs:  Medium and Large 1-2  2 yr old 1000 lb cows w/125 lb calves 1600.00; 5 yr old 1500 lb cows w/300 lb calves 1775.00; 5-6 yr old 1075-1150 lb cows w/200 lb calves 1525.00-1675.00; 7-10 yr old 1075-1125 lb cows w/75-150 1200.00-1325.00.
    • Springfield, MO
      • Bred Cows:  Medium and Large 1-2  3-6 yrs 2nd and 3rd stage 1085-1330 lbs 1135.00-1400.00, 1st stage couple 1035&1085 lbs 1175.00-1260.00; 7 yrs to short and solid mouth 2nd and 3rd stage 1075-1350 lbs 885.00-1200.00. Large 1-2  7 yrs to short and solid mouth 2nd and 3rd stage 1402-1660 lbs 1050.00-1325.00; broken mouth 3rd stage 1410-1535 lbs 1125.00-1225.00. Medium and Large 2  6 yrs to short and solid mouth 2nd and 3rd stage 1100-1295 lbs 860.00-925.00. Medium 1-2  3-7 yrs 2nd and 3rd stage 850-1055 lbs 800.00-1135.00, 1st stage 760-820 lbs 875.00-910.00; short and solid mouth to aged 2nd and 3rd stage 1050-1060 lbs 725.00-910.00 per head.
      • Cow/Calf Pairs:  Medium and Large 1-2  5-6 yrs 1060-1355 lb cows w/165-300 lb calves 1485.00-1500.00; short and solid mouth to aged 1178-1365 lb cows w/babies to 200 lb calves 1285.00-1450.00. Medium and Large 2  5 yr 1150 lb cow w/130 lb calf 1300.00. Medium 1-2  2-3 yrs couple 850 lb cows w/120-225 lb calves 1400.00-1500.00 per pair. 
    • West Plains, MO
      • Bred Cows:  Medium and Large 1-2  2-6 yr old 1075-1545 lb cows in 2nd-3rd stage 1350.00-1700.00 per head; 7 yr to Short-solid mouth 1250-1435 lb cows in 3rd stage 1100.00-1300.00 per head.  Medium and Large 2  2-7 yr old 1010-1380 lb cows in 2nd-3rd stage 900.00-1250.00 per head;  Short-solid to broken mouth 795-1310 lb cows in 2nd to 3rd stage 700.00-1100.00 per head.  Large 1-2  4-6 yr old 1063-1930 lb cows in 2nd to 3rd stage 1200.00-1450.00 per head.  Medium 1-2  2-6 yr old 970-1415 lb cows in 2nd to 3rd stage 1000.00-1100.00 per head. 
      • Cow-Calf Pairs:  Medium and Large 1-2  2-6 yr old 1030-1495 lb cows with 150-200 lb calves 1500.00-1700.00 per pair; Short-solid to brokenmouth 1113-1165 lb cows with 250-300 lb calves 1250.00-1550.00 per pair.  Medium and Large 2  2-6 yr old 800-1085 lb cows with 100-200 lb calves 1300.00-1550.00 per pair; Short-solid to broken mouth 925-1150 lb cows with 125-300 lb calves 950.00-1100.00 per pair. 
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    Tire-Changing Ramp for Trailers
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    Canadian Cattle:
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    Alberta Beef Producers: Alberta direct cattle sales so far this week have seen light trade develop with dressed sales 5.00-6.00 higher than the previous week. The majority of dressed sales have been reported at 275.00 delivered. US packer interest in the western Canadian fed market has been limited as all reported cash sales have traded locally.
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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 $0.7786 U.S. dollars
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    Prices for the week ending May 13th:
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    Cattle on Feed Report:
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    United States Cattle on Feed Up 1 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 10.8 million head on May 1, 2016. The inventory was 1 percent above May 1, 2015.
    • Placements in feedlots during April totaled 1.66 million head, 7 percent above 2015. Net placements were 1.59 million head. During April, placements of cattle and calves weighing less than 600 pounds were 334,000 head, 600-699 poundswere 225,000 head, 700-799 pounds were 390,000 head, and 800 pounds and greater were 715,000 head.
    • Marketings of fed cattle during April totaled 1.66 million head, 1 percent above 2015.
    • Other disappearance totaled 76,000 head during April, 15 percent above 2015.
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    Cattle on Feed Inventory in 1,000+ Capacity Feedlots as of May 1st
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    Number of Cattle Placed on Feed in 1,000+ Capacity Feedlots in April
    Millions of Head
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    Number of Cattle Marketed from 1,000+ Capacity Feedlots in April
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    Cattle on Feed by State as of May 1st
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    Recalcitrant Live Cattle Futures:
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    Don't doubt for a second that fed cattle prices can not decline $12 cwt. during the course of 30 days. After all, they have advanced $10 cwt. in two short weeks. In spite of this risk to the market, it is surprising to see live cattle futures wanting badly to sell lower --- all while a cash market is surging higher. Markets have the ability to confound and they frequently do.

    Underlying the lack of bullish sentiment in the live cattle futures contract is the fact that cattle supplies will be increasing and some of those year to year increases will historically be large. This provides a backdrop for a longer term bearish sentiment. There also is the fact that market bulls have been destroyed during the past twelve months. Trading the long side of cattle has not only been harrowing, but at times disastrous, both financially and emotionally.

    The backdrop for the future may be negative but there are developing several important fundamental factors that have the potential to change the price landscape for cattle. The value of the dollar against most of the trading currencies involved in global beef trade has tumbled. This makes our beef imports more expensive and our exports cheaper to foreign beef buyers. This trend is confirmed by any superficial analysis showing sometimes large and material declines in beef from Australia and New Zealand as well as large increases of export beef destined for China and Japan.

    The problem of carcass weights running 15-25# over prior year has almost run its' course and most analysts are forecasting the first week in a long period of time when carcass weights fall under prior year is at our door step. This possibility includes the chance that the carcass weight drop under prior year and this will require more daily slaughter not less to produce the same tonnage.

    The quality grade is also declining with shorter days on feed. The last cattle on feed showed less cattle with 120 days on feed from prior year.

    Also bolstering demand for beef are the generous margins currently present at the retail and processing levels. The harsh days of weak demand for beef, that characterized much of the winter months, has given way to improved demand created when two important sectors are now pulling beef through the pipeline rather than forcing packers to push beef out with lower prices. Consumers also are benefiting with store prices running 15-20% below last year. This past week marked the first week of a slaughter over 600,000 cattle in a year and a half.

    Sustaining the current price level or posting additional advances in the cash markets will move the feeding industry into profits not seen in months that seem like years. The negativity in the futures market has had the additional benefit of putting a lid on replacement prices. Imagine what feeder cattle would cost if the deferred futures posted prices in the mid $130s -- where cash cattle are currently trading.

    All this information does not guarantee traders a quick profit by jumping into the June live cattle futures. A discounted board is healthy for the industry and causes all producers to push cattle to market sooner which in turn holds down tonnage. The surge in box prices can turn on a dime and buying for the upcoming Memorial day holiday will be followed by the dog days of summer when beef demand often wanes. No matter what occurs in the coming weeks, the turnaround was welcome by a frustrated industry that has suffered through some volatile times.

    Ag Center Cattle Report

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    Meat Availability Continues to Expand:
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    Production data for week ending May 14 shows that meat supply availability in the US continues to expand, with beef supply increases leading all other proteins.

    Beef production for the week was estimated by USDA at 490.5 million pounds, 6.1 per cent larger than a year ago. For the last four weeks US beef production has averaged 25.8 million pounds/week higher than the previous year.

    The last time we saw this kind of y/y increase in beef production was in early 2011. Keep in mind we are talking about the change in supply rather than total tonnage.

    We have had a couple of 490 million pound production weeks recently. One of them was in mid September of last year and another was in mid December.

    In both cases prices cratered as market found it difficult to absorb the large supply. This time, however, is a bit different because of Memorial Day demand and the general increase in meat consumption over the spring and early summer.

    Pork production for the week was 461.2 million pounds, +1.8 per cent from a year ago. In the last four reported weeks pork production is up an average of 11 million pounds. Chicken production during this time also is up almost 20 million pounds and turkey production is up 4.6 million.

    Combined beef, pork, chicken and turkey supplies are up an average 3.5 per cent in the last four weeks.

    While there is a lot of consternation/speculation as to why futures and cash prices have been so volatile in recent months, the net increase in supply availability for all proteins remains the key bearish factor in the short term.

    It is important to keep in mind that retail prices take time to adjust. This applies to the price of those ribeye steaks in the retail meat case or the price of a ribeye steak on the restaurant menu.

    Over the last few years retail prices have increased sharply as US meat supplies either declined (as in the case of beef) or increased at a slower pace than normal population growth. Per capita beef supply availability in 2015 was down 10 per cent compared to what it was in 2010 and pork availability increased just 3 per cent.

    Chicken were up 7 per cent, with all the growth happening last year. Over time retail prices adjusted to the tight supply environment. Retail beef prices by 2015 had increased 43 per cent compared to what they were in 2010. Pork retail prices were up 24 per cent and composite broiler retail price was up 12 per cent.

    Now there is more red meat and poultry coming at us but it will take some time for the price transmission mechanism to catch up. And this is not because of some nefarious scheme on the part of retailers and foodservice operators to try and capture more margin. Rather, it simply reflects both logistic and operational challenges.

    It takes time to come up with new menu items that better reflect the new pricing environment.

    Example, over the years restaurants started pushing smaller size steaks from cheaper cuts or reduced the amount of meat on a sandwich. It takes time to now revert back.

    Sure, retailers have the ability to run special promotions for certain times of the year - Memorial Day being one of those times. But once the promotion ends, prices revert back.

    There is no guarantee for the retailer that keeping prices low will generate more sales volume. And if that does not happen then they will see a sharp drop in their overall revenue, making for uncomfortable performance review sessions for the meat buyers. Meat supplies are up, it just will take time for prices to catch up.

    Daily Livestock Report

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    Beef Prices Lower in April:
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    USDA’s Economic Research Service, using U.S. Consumer Price Index data for April, made the following calculations:
    • In April, Choice Beef at retail slipped about 12 cents per pound from the March level and was about 30 cents (5%) lower than a year earlier. 
    • All Fresh Beef was calculated at 3 cents per pound below a month ago and down 23 cents (4%) compared to 2015.
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    Prices from a Wal-Mart Super Center -- Wal-Mart is the world's largest grocery retailer.
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    Photo of the Week:
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  • Red Angus Bred Heifers... N. Central TX*
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    Shootin' the Bull Weekly Analysis:
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    In my opinion, things are really fixing to get interesting.  The weekly close only continuation chart has a wave count that suggests a new low close under $120.72 is warranted to complete the major bear market.  I was holding my breath Friday at the close to see if this would materialize and it did not.  The close for this week is $121.05.  So, it will be next week before the next opportunity presents itself for this.  So, what does this mean?  I would anticipate next week being lower.  If everything were in a perfect world, June fats would trade down to, and close somewhere south of, $117.00 by Friday of next week.  This would be anticipated to complete the entire wave sequence from the historical high.  Since there appears little decisiveness in direction, the current wave 4 on the weekly close only continuation chart could be prolonged for another week.  Alternative wave counts remain, but without a new low close on the weekly chart, I will keep this on the front burner for sometime to come.  On the flip side of this, if traders are able to close June under $120.72 on Friday of next week, then I will be anticipating a significant rally in the fats.  The cattle market appears to be in good shape and the pessimism at present is making for what appears to be an advantageous basis spread.  If we come into a lower market next week, I will be looking at buying strategies to own the August futures. 

    The liquidation of cattle was immense from '09 through '11.  The beginnings of expansion were slow, but quickly gained speed with price advancement.  So much so that cows were being kept on life support just to drop a calf.  Today, that practice is no longer continuing.  While curtailing expansion may have begun a month or so ago, I would anticipate that from here forward, cow/calf operations will begin to slow expansion to a level that is more of an even keel.  Finding middle ground between the excessive liquidation and expansion is now anticipated.  This suggests that inventory increases are anticipated, but not at the same rate as previous.  Therefore, all in all, I would begin to anticipate feeder cattle prices to begin to contract as well.  Wide swings in production caused wide swings in price.  Contracting production is anticipated to contract prices.  At this time, I anticipate August feeders to continue with this contraction scheme.

    If so, it leads me to anticipate August trading up to approximately $155.00 before finding resistance.  This would be an approximate $22.00 rally from contract low.  At the $155.00 level, I will look to buy the at the money puts.  This exposes positions to the greatest amount of option premium and creates, at bear minimum, a floor from which to allow time to go by to see what materializes next.  It will be that next move that is the most important.  A continuation of the rally up towards $160.00 will lead me to sell a call at a strike that one can live with knowing no further gains can be realized on the sale of inventory.  A move lower from the $155.00 area and I would look to sell a put at somewhere under current contract low for the August.  Either of these would lower the initial premium for the put purchased and increase risk above or below the strikes chosen if initiated.  I recommend you view the webinar I produced on Thursday of this week for clarification of this.  Drop me an email and I will be glad to forward it to you.

    On Wednesday of this week, the release of the Fed's minutes wreaked havoc on all commodities.  Name a sector and it was pummeled.  Grains were not granted any leniency.  However, as the Fed's rhetoric faded, grains began to shake off the comments of higher rates to start moving higher themselves.  I continue to like owning corn. While many have been courteous to explain how wrong I am, owning corn in the face of being excessively long of feeder cattle inventory is not a bad hedge in my opinion.  Not only that, the growing season is so young that anything could change the yield dramatically.  So, although corn has had little flair, the wave count suggests to anticipate December corn up to $4.27. 

    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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    Choice Boxed Beef Cutout, Slaughter, & Feeder Steers:
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    USDA April Livestock Slaughter Report:
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    Commercial red meat production for the United States totaled 3.98 billion pounds in April, down 1 percent from the 4.02 billion pounds produced in April 2015.
    • Beef production, at 1.96 billion pounds, was 2 percent above the previous year. Cattle slaughter totaled 2.41 million head, up 1 percent from April 2015. The average live weight was up 10 pounds from the previous year, at 1,348 pounds.
    • Veal production totaled 6.0 million pounds, 10 percent below April a year ago. Calf slaughter totaled 34,800 head, down
    • 2 percent from April 2015. The average live weight was down 25 pounds from last year, at 293 pounds.
    • Pork production totaled 2.00 billion pounds, down 3 percent from the previous year. Hog slaughter totaled 9.37 million head, down 3 percent from April 2015. The average live weight was up 1 pound from the previous year, at 285 pounds.
    • Lamb and mutton production, at 12.8 million pounds, was down 6 percent from April 2015. Sheep slaughter totaled 189,000 head, 5 percent below last year. The average live weight was 135 pounds, down 2 pounds from April a year ago.
    January to April 2016 commercial red meat production was 16.2 billion pounds, up 2 percent from 2015.

    Accumulated beef production was up 4 percent from last year, veal was down 6 percent, pork was up slightly from last year, and lamb and mutton production was down 1 percent. 

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    Out of Kilter:
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    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, it's because one market can't keep pace or pass on the costs of the other. 

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

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    5 Year Moving Average:
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    Crude/Cattle Correlation:
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    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.

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    5 Year Moving Average:
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    Beef Bounces Back:
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    Beef and cattle prices bounced back sharply in the past ten days.  Choice boxed beef ended last week at $218.56/cwt., up $14.82cwt. from the recent low on May 6.  Wholesale prices were generally higher last week for end meats (round and chuck) as well as middle meats (rib and loin).  Five-market fed cattle prices ended the week of May 13 at $132.64/cwt., up $14.61/cwt. from the May 4 low.  Auction prices for feeder cattle in Oklahoma were mostly up four to six percent in the past one to two weeks.

    Price improvement has occurred despite continuing year over year increases in beef production.  For the week ending May 14, estimated beef production was up 6.1 percent year over year, contributing to a ten week average increase of 5.3 percent compared to the same period last year.   Cattle slaughter was estimated at 601 thousand head last week, up 5.8 percent year over year.  Average cattle slaughter has been 4.1 percent higher than last year for the last ten weeks.  Carcass weights are still up year over year but have decreased dramatically in recent weeks.  Average steer carcass weights were 868 pounds last week, down 26 pounds from early March and just 3 pounds heavier than the same period last year.

    The recent rally in cattle and beef prices provides a new base for seasonal price movements through the summer and the remainder of the year.  Beef production is expected to increase seasonally through June but this will be tempered both by the recent acceleration in cattle marketings that is pulling cattle ahead of the seasonal peak combined with smaller year over year increases in carcass weights.   Beef production will likely trend higher in the second half of the year but carcass weights may partially offset increased cattle slaughter.  The recent seasonal decline in carcass weights may not be done yet and carcass weight may drop below year earlier levels for much of the second half of the year.  Steer carcass weights have declined 62 pounds from the October peak last fall.  This compares to an average fall to spring seasonal decrease of 41 pounds the past five years.  A typical seasonal increase in carcass weights this fall from current levels would leave steer carcass weights ten to 20 pounds below the record carcass weights from the fall of 2015.  This will depend on whether feedlots continue to market cattle aggressively and maintain a faster turnover rate.

    Derrell S. Peel, Oklahoma State University Extension

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    Slaughter Cows & Bulls:
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    Slaughter cows and bulls steady to 2.00 higher. 

    Cutter Cow Carcass Cut-Out Value Friday afternoon was 173.73 -- Up 1.45 from last Friday.

                      %Lean    Weight       Montana         Oklahoma         Alabama 
    Breakers 75-80%  1100-1600  77.00-80.00   76.00-78.00     71.00-76.00
    Boners     80-85%  1000-1450  73.50-78.00   75.00-79.00     74.00-79.00
    Lean         85-90%  1000-1300  71.00-76.00   74.00-76.00     67.00-71.00
    Bulls         88-92%  1300-2500  91.00-95.50   98.00-103.00   95.00-100.00

                    Confirmed   Week Ago    Year Ago      WTD     Week Ago    Year Ago
    National      6,103           6,693          6,467        34,939        34,680        30,389
    S. Central   1,964           2,006          2,006        10,106           9,541          9,062
    N. Central      486               562             656          2,421           2,344          2,375
    East            1,216            1,397          1,659          8,110           9,001          7,610
    West              964             1,198            854          6,814           6,505           5,862
    Midwest     1,473             1,530          1,292         7,488           7,289           5,480

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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, May 21, 2016 was estimated at 933.8 million lbs. according to the U.S.Department of Agriculture's Marketing Service. This was 2.3 percent lower than a week ago and 1.4 percent higher than a year ago.  Cumulative meat production for the year to date was 1.1 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 Market News Service reports feed ingredient prices for the week ending May 17 were mixed. 
    • Soybean Meal was 8.40 to 23.40 higher. Cottonseed Meal was mixed, 5.00 lower to 40.00 higher. Canola Meal was 9.40 to 20.00 higher. Linseed Meal was 20.00 to 50.00 higher. Sunflower Meal was 15.00 to 30.00 higher. 
    • Whole Cottonseed was steady to 15.00 higher. 
    • Crude Soybean Oil was 41 to 66 points lower. Crude Corn Oil was steady to 360 points lower. 
    • Ruminant Meat and Bone Meal was mixed, 10.00 lower to 65.00 higher, mostly steady to 10.00 lower. Ruminant Blood Meal was mixed, 15.00 lower to 25.00 higher. Feather Meal was 5.00 to 45.00 lower, mostly 5.00 to 10.00 lower. Menhaden Fishmeal was steady to 50.00 lower. 
    • Corn Hominy was steady to 2.00 higher. Gluten Feed was steady to 6.00 higher. Corn Gluten Meal was steady to 10.00 higher. 
    • Distillers Dried Grain were steady to 22.00 higher. 
    • Wheat Middlings were steady to 8.00 lower. Wheat millrun was steady to 10.00 higher.

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    Bullish/Bearish Consensus:
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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 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.

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    Bullish/Bearish Consensus: Cattle
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    Bullish/Bearish Consensus: Corn
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    Stock Markets & Economic News:
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    Stocks were modestly higher for the week. The technology-laden Nasdaq Composite Index outperformed its peers for the second consecutive week, while the smaller-cap benchmarks outperformed their large-cap counterparts by a lesser margin. Traders noted that trading volumes broke out of their recent slump on Tuesday, and Wednesday was busier still.

    Trading Monday began on an up note, helped by a surge in oil prices and a rally in tech stocks. Heavily weighted Apple also boosted the indexes following news that Warren Buffett’s Berkshire Hathaway had acquired a $1 billion stake in the company -- a decision that was made by Buffett’s lieutenants and potential successors, The Wall Street Journal reported. Stocks gave back nearly all the gains the next day, however. The firm’s traders pointed to fears about an abrupt slowdown in the Chinese economy, worries that Britain might choose to leave the European Union, and political uncertainty in the U.S. as culprits for the decline.

    Some favorable economic data released may have been more indicative of an upcoming rate hike. Industrial production rebounded in April, rising 0.7% for the month of April. Auto manufacturing remained a central positive in the reading, despite mediocre sales year-to-date. Housing starts and permits both rose at a moderate pace. Moreover, consumer prices rose at a solid pace in April, even after sharp increases in oil and energy prices were excluded. Sentiment appeared to weaken in response, and the firm’s traders noted that the inflation, industrial production, and housing starts data caused futures contracts to reflect a considerable increase in the prospects for a June rate increase. 

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    U.S. Stocks:
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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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    • The NWS WPC 7-Day Quantitative Precipitation Forecast (QPF) calls for significant rainfall accumulations in the Gulf Coast, Mid-Atlantic, Southeast, and Texas with totals ranging from two-to-four inches. Otherwise, lesser accumulations are forecasted for extreme northern California, the Northern Rockies, and the Pacific Northwest. 
    • The CPC 6–10 day outlooks call for a high probability of above-normal temperatures east of the Rockies while the West is expected to be below-normal. Below-normal precipitation is forecasted for the Eastern Tier and Desert Southwest while there is a high probability of above-normal precipitation in the western portions of the Midwest and South, Northern Great Basin, Northern Rockies, Pacific Northwest, and across the Plains states.
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    Drought Outlook:
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    Feedyard Closeouts: Profit/(Loss)
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    Typical closeout for un-hedged steers sold this week:
    • Placed On Feed 150 days ago = December 22nd
    • Projected Profit/(Loss) based on the futures when placed on feed: ($57.64)
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    Cost of 750 lb. steer delivered to the feedyard @ $153.65 per cwt. 
    $1,152.38
    Cost of gain* for 600 lbs. @ $82.56 per cwt.
    $495.36
    Interest** @ Prime + 2% on cattle cost for 150 days
    $26.05
    Interest** @ Prime + 2% of the feed cost for 150 days
    $5.60
    Total Cost & Expense
    $1,679.38
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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
    $75.62
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    Profit/(Loss) per head for previous week
    $128.23
    Change from previous week
    -$52.61
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    Sale price necessary to breakeven
    $124.40
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    Projected closeout for steers placed on feed this week:
  • Projected Sale Date @ 150 days on feed = October 17th
  • Cost of 750 lb. steer delivered to the feedyard @ $152.12 per cwt.
    $1,140.90
    Cost of gain* for 600 lbs. @ $84.83 per cwt.
    $508.98
    Interest** @ Prime + 2% on cattle cost for 150 days
    $27.79
    Interest** @ Prime + 2% of the feed cost for 150 days
    $5.79
    Total Cost & Expense
    $1,681.42
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    Sale proceeds: October Live Cattle Futures @ $117.10 per cwt.
    $1,580.85
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    Projected Profit/(Loss) per head
    ($100.57)
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    Projected Profit/(Loss) per head for previous week
    $73.05
    Change from previous week
    -$27.52
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    Sale price necessary to breakeven
    $124.55
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    *In addition to feed costs, "Cost of Gain" includes death loss, medicine, insurance, etc.
     **Interest Rate @ Prime + 2.00% - Prime Rate as defined and published by The Wall Street Journal
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    Typical closeout for steers sold this week and hedged when placed on feed: ($57.64)
    Typical closeout for un-hedged steers sold this week: $75.62
    Projected Profit/(Loss) based on the futures & estimated Cost of Gain this week: ($100.57)
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    Slaughter Cattle:
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    Friday negotiated cash trade was light on light to moderate demand in the Northern Plains and Western Cornbelt. Compared to Thursday in Nebraska, a few live sales sold mostly 2.00 lower at 129.00. Throughout this week in Nebraska dressed sales have sold 4.00-6.00 lower than last week from 204.00-206.00. In Colorado a few live sales have sold today from 129.00-130.00. In the Western Cornbelt dressed sales sold mostly at 204.00 with a few live sales ranging from 126.00-130.00. Trade was inactive on light demand in the Southern Plains. On Thursday in the Southern Plains live sales sold at 130.00.

    Livestock Slaughter under Federal Inspection:
                                     CATTLE    CALVES    HOGS         SHEEP
    Friday       (est)        110,000       1,000          385,000      8,000
    Week ago (est)       112,000       1,000          402,000       8,000
    Year ago (act)         111,000       2,000          408,000       8,000
    Week to date (est)  558,000      8,000       2,077,000     40,000
    Last Week (est)      561,000       8,000       2,118,000     39,000
    Last Year (act)         566,000      9,000       2,103,000     40,000

    Saturday      (est)       29,000         0                 42,000         0
    Week ago (est)         40,000         0                  42,000         0
    Year ago (act)              5,000         0                 37,000         0
    Week to date (est) 587,000        8,000      2,119,000      40,000
    Last Week (est)      601,000        8,000     2,160,000      39,000
    Last Year* (act)       571,000        8,000     2,140,000      40,000
    2016 YTD           11,210,000   170,000   44,842,000    779,000
    2015 *YTD         11,017,000   175,000   44,970,000    789,000
    Percent change        1.8%          -2.8%       -0.3%             -1.2%

    Negotiated prices paid for Slaughter Steers and Heifers:
    Live basis              Steers                                       Heifers
    Over 80% Choice   128.00-130.00 avg 129.17   126.00-129.00 avg 128.39
    65 - 80% Choice    129.00-130.00 avg 129.25   129.00-130.00 avg 129.40
    35 - 65% Choice    129.00-130.00 avg 129.59   130.00-130.00 avg 130.00
    0 - 35% Choice             -                                                     -
    Total all grades    128.00-130.00 avg 129.29   126.00-130.00 avg 128.88 

    Dressed basis
    Over 80% Choice   204.00-206.00 avg 204.46   204.00-204.00 avg 204.00
    65 - 80% Choice    204.00-206.00 avg 205.24   204.00-206.00 avg 204.78
    35 - 65% Choice    206.00-206.00 avg 206.00   204.00-204.00 avg 204.00
    0 - 35% Choice             -                                                     -
    Total all grades    204.00-206.00 avg 204.65   204.00-206.00 avg 204.49

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    Corn Crop Planted:
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    National Grain Summary:
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    Compared to last week, grain and soybean bids traded mixed.  Corn and soybeans saw some pressure from favorable weather outlook for the Midwest.  The higher dollar also weighed on the grains, along with the lower outside markets.  However, soybean meal gave some support to the soy complex, as well as other commodities such as corn, as commercial buying persisted.  The N.O.P.A. crush report for April was released coming in at 147.6 million bu, a 9 million bu reduction from March.  Soybeans were 36 percent planted, with 10 percent emerged.  Corn was 75 percent planted, with 43 percent emerged.  In terms of crop progress, soybeans and corn are above their five year average.  Weekly export sales for wheat were reported at 27.5 mb (748,700 mt), with 6.4 mb (175,200 mt) for the 2015-2016 marketing year.  Export sales for corn were bullish coming in at 79.3 mb (2,013,800 mt) with 58 mb (1,473,100 mt) for the 2015-2016 marketing year.  Sales of grain sorghum were listed at 2.0 mb (51,600 mt) for the 2015-2016 marketing year.  any soybeans listed a total of 26.3 mb (714,700 mt) with 20.4 mb (556,400 mt) for the 2015-2016 marketing year.

    Corn futures favored a firmer tone today, with nearby contracts leading gains. For the week, July corn posted a gain of 4 cents and December corn posted a gain of 1 1/2 cents and ended the week just one-quarter cent shy of the key $4.00 level. Futures are holding up rather well in light of the recent recovery in the U.S. dollar index. But if the dollar continues to improve, it could slow demand for U.S. corn, which has been red-hot. Traders will also pay attention to the weather next week, as forecasts call for rains across the Corn Belt. 

    Soybean futures saw choppy to lower trade for much of the session. July and August futures ultimately ended 2 3/4 cents and 1/2 cent higher, respectively, while deferred months were down 1 3/4 to 4 1/2 cents thanks to some bull spreading. For the week, old-crop posted slight gains, while new-crop ended down slightly. Soymeal surged while soyoil plunged today, causing the crush margin to explode.

    Wheat futures did not stray too far from unchanged at week's end. The SRW market posted losses around a penny today, while HRW wheat ended a cent higher across the board. HRS wheat finished narrowly mixed. For the week, the SRW market posted slight losses. Ratings for the SRW wheat crop have been sliding and heavy rains and chilly temps have raised crop quality and disease concerns. And more rain is in store for these production areas next week. How much rain falls and USDA's updated crop ratings will garner attention next week. 

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    Five Year Moving Average - Corn & Wheat
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    Your Suggestions:
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