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Weekly Market Summary
For the week ending January 19, 2018
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The Cattle Range Market Trendlines:
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With the exception of boxed beef, the other market indicators gained ground this week.  The market remains within the relatively narrow trading range that has been in place since early fall.
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10 Day Market Trendline
Change from Previous Day: -0.19%
  Change from 10 Days Ago: +0.77%
  Change from 60 Days Ago: -2.33%
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60 Day Market Trendline
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The Trendlines are indicators of overall cattle/beef market strength and are based on daily market factors.  Each daily factor is the aggregate weighted total of the Gain/(Loss) for 12 market indicators compared to the previous trading day. 
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  • View previous Summaries in the..WMS Archives
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  • For daily market news, check Cattle Industry News or Market Reports
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    Regular Contents: 
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  • Weekly Market Overview.
  • National Feeder & Stocker Cattle Weekly Summary.
  • Stocker & Feeder Steers.
  • Stocker & Feeder Cattle Weekly Receipts.
  • 5 Year Moving Avg. - Stocker, Feeder, & Slaughter Steers.
  • Mexican Feeder Cattle Weekly Import Summary.
  • Selected Auction Reports.
  • Direct Sales of Feeder & Stocker Cattle.
  • Representative Sales of Cow & Pairs.
  • Canadian Cattle.
  • USDA National Retail Beef Report.
  • Photo of the Week.
  • "Shootin' the Bull" Weekly Analysis.
  • U.S. Dollar - 6 Month Chart.
  • Choice Boxed Beef Cutout, Slaughter, & Feeder Steers.
  • Feeder Steers/Corn Correlation.
  • Slaughter Cows & Bulls.
  • Est. Weekly Meat Production Under Federal Inspection.
  • Weekly Hay Reports.
  • Weekly Feedstuffs Market Review.
  • Bullish/Bearish Consensus: Cattle & Corn.
  • Stock Markets & Economic News.
  • Weather Outlook.
  • Feedyard Closeouts: Profit/(Loss).
  • Slaughter Cattle.
  • National Grain Summary.
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    Of Possible Interest:  The views expressed in the content below are included in the WMS because we found them to be of interest but do not necessarily reflect the views of The Cattle Range.
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    Weekly Market Overview:
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    On-Line Store
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    National Feeder & Stocker Cattle Weekly Summary:
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    RECEIPTS:  Auctions   Direct  Video/Internet   Total
    This Week     225,000     51,100         2,400         278,500
    Last Week     372,300     39,800       118,200       530,300
    Last Year       248,400     60,200        83,400        392,000

    Compared to last week, steers and heifers trends were all over the board.  Early week sales (if auctions were open due to severe cold temperatures and treacherous roads) of feeder steers and heifers were reported steady to 8.00 lower; mid-week sales were reported 2.00 to 8.00 higher after futures rallied and Live Cattle Futures had near limit higher moves on Wednesday.  Steer and heifer calves followed the same trendline for the week; steady to 6.00 lower early week and steady to 8.00 higher mid-week.  Bidders and buyers flipped their buyers cards readily in those mid to late week auctions as they tried to keep up with the uptick in futures. 

    With the CME closed Monday, Tuesday rolled around and the frenzy was on again.  After the Feeders closed last Thursday at 143.82; it has been up from there again.  The roller coaster is hopefully hitting another high and can sustain the momentum in weeks ahead.  In the North Plains, heavier fleshed backgrounded cattle are plentiful however grass cattle and high quality replacement heifers are in high demand currently with not enough to go around for the buyers.  Last week's large supply of cattle on offer across much of the country had the bears running for the woods thinking that feedyards were full and the longs would dictate the market.  Anecdotes of North Plains feedyards shipping cattle to the South Plains to complete kills for this week were abuzz around the industry with feedyards willing to wait and see if prices get better later in the week.

    Freezing cold temperatures the past few weeks have been a concern for the wheat crop in all areas.  Producers do not like to see that low of temperatures around and they are keeping watch on their fields to see how much winterkill they will incur.  Dressed steer slaughter weights were reported at 900 for the week ending January 6, 2018; 5 pounds below last year and 10 pounds below the previous 5 year average.  This week's big news centered around the largest cattle feeder in the world divesting some assets and selling their U.S. feedyards to an investment firm for approximately $200 million.  According to reports the current management team and agreements to supply a packer with cattle will continue.  Auction volume this week included 64 percent weighing over 600 lbs and 42 percent heifers.

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    Stocker Steers:
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    Feeder Steers:
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    Stocker & Feeder Cattle Weekly Receipts:
    Weekly sales of Stocker Calves & Feeder Cattle sold via auctions, direct country sales, and video/Internet sales as reported by the UDSA Market News
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    Five Year Moving Average - Stocker, Feeder, & Slaughter Steers:
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    Cattle Futures Summary: Live cattle futures closed the day with losses of 32.5 to 75 cents, with nearby Feb down a nickel. Feeder cattle futures were $1 to $1.575 in the red. The CME feeder cattle index on January 18 was at $148.01, up $1.54 from the previous day. Wholesale boxed beef values were lower on Friday afternoon. Choice boxes were down 83 cents at $204.86, with Select boxes 71 cents lower at $200.16. Estimated week to date FI cattle slaughter is at 615,000 head including Saturday. That is 4,000 head more than last week. Cash trade was slow to develop this week, but late trade after Friday’s bell was reported in the $122-123.50 range. USDA reported Beef export sales for the week that ended Jan 11 totaled 15,008 MT. That was slightly ahead of the previous week and much larger than the same time last year. Shipments of beef were tallied at 15,072 MT, nearly 5.06% above the same week in 2017. Managed money spec traders were at their lowest reported CFTC bullish position since Nov 2016 on Tuesday.
     
  • Commitment of Traders - Live Cattle Futures.
  • Commitment of Traders - Feeder Cattle Futures.
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    Mexican Feeder Cattle Weekly Import Summary
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    Receipts EST: 12,000     Week ago Act: 6,290     Year ago Act: 17,332

    Compared to last week, steer calves and yearlings firm to 8.00 higher. Heifers 3.00 to 8.00 higher. Trade moderate to active, demand moderate to good. Supply consisted of steers and spayed heifers weighing 300-600 lbs. 

    Feeder steers: Medium and large 1&2, 300-400 lbs 170.00-190.00; 400-500 lbs 150.00-170.00; 500-600 lbs 140.00-152.00; Medium and large 2&3, 300-400 lbs 155.00-175.00; 400-500 lbs 135.00-155.00; 500-600 lbs 125.00-137.00.

    Feeder heifers: Medium and large 1&2, 300-400 lbs 145.00-160.00; 400-500 lbs 135.00-150.00; 500-600 lbs 125.00-140.00. 

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    Selected Auction Reports:
    "Click" on individual.auction links.for complete report
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    Tulia Livestock Auction - Tulia TX
    Receipts:  3170    Last Week:  4133    Year Ago:  939
    Compared to last week:  Feeder steers and heifers sold 5.00 to 10.00 higher as prices rebounded from last week's loss.  Trade activity was active on very good demand.  More calves in the offering this week as the drought continues and winter wheat is getting short.

    Pratt Livestock Feeder Cattle Auction - Pratt, KS
    Receipts:  2312              Last Week:  3550                 Year Ago:  1834
    Compared to last week: Feeder steers 650-1000 lbs 4.00-8.00 higher; Feeder heifers 650-850 lbs 3.00-6.00 higher on a light test. Steer and heifer calves steady to higher undertone noted on a light supply.

    Farmers & Ranchers Livestock Commission Co. - Salina KS
    Receipts:  3808    Last Week:  3089    Year Ago:  3088
    Compared to last week: Steers 600-1050 lbs 1.00-6.00 higher; 600 lbs and under steady undertone noted. Heifers 600-1000 lbs 3.00-4.00 higher; 600 lbs and under higher undertone noted.

    Huss Platte Valley Auction - Kearney NE
    Receipts:  4300    Last Week:  4977    Year Ago:  3891
    Compared to last week steers sold fully steady to 5.00 higher. Heifers under 750 lbs sold 5.00 to 8.00 higher with no other comparisons. Buyers bid readily from start to finish on all offerings. Good demand was also noted for top quality Red Angus steers with very good demand for replacement heifers.

    Valentine Livestock Auction Market - Valentine NE
    Receipts:  1510 Last week:    Last year: 
    Bred Cow and Heifer Auction consisted of black and red angus offerings bred to lbw black and red bulls. Several offerings of bred heifers to calve Feb and Mar AI'd for 2 to 3 days and bull breds calving 20 to 40 days.

    Denison Wtd Avg Feeder Cattle Auction - Denison IA
    Receipts:  2286 
    Cattle where Steady to $4 higher or lower depending on flesh compared to Monday Sale.  Offering of feeder cattle over 600 pounds was 79 Percent with 52.9 percent steers and 47.1 percent heifers.

    El Reno Cattle Narrative - El Reno OK
    Receipts           Week Ago             Year Ago
      7,189                15,130                  5,684
    *** Final Report *** Compared to last week:   Feeder steers 8.00-10.00 higher.  Feeder heifers 4.00-8.00 higher.  Demand very good as cattle futures posted another positive day.  Steer and heifer calves were lightly tested, however most
     trades sold 2.00-4.00 higher.

    Mitchell Livestock Wtd Avg Report - Mitchell SD
    Receipts:  8075    Last Week:  3590    Year Ago:  7177
    Compared to last week:  Steers under 600 lbs sold with higher undertones in a narrow comparison, 600-650 lbs 1.00 to 6.00 higher, 650-850 lbs mostly 7.00 to 10.00 higher with couple instances seen of 15.00 higher, 850-900 lbs 4.00 to 6.00 higher, 900-1000 lbs steady to 3.00 higher in narrow comparisons.

    Cattleman's Livestock Auction - Dalhart, TX
    Cattle and Calves: 1,450      Week ago: 2,747      Year Ago:  1,895 
    Compared to last week:  Steer and heifer calves under 500 lbs firm, instances heifer calves 500-600 lbs 2.00-4.00 higher.  Feeder steers and heifers over 600 lbs 3.00-4.00 higher.  Slaughter cows and bulls 1.00-2.00 higher.

    Joplin Regional Stockyards Feeder Cattle Wtd Avg - Carthage MO
    Receipts           Week Ago              Year Ago
      2,322                 8,736                     2,656
    **CLOSE***  Compared to last week,  steers under 600 lbs unevenly steady, over 600 lbs 4.00 to 6.00 lower, heifers under 600 lbs steady to 3.00 lower, over 600 lbs 2.00 to 6.00 lower.  Hazardous travel conditions in the trade area
    curtailed the receipts.

    Sioux Falls Regional Livestock wtd Avg Report - Worthing SD
    Receipts:  6293    Last Week:  4998    Year Ago:  4081
    Compared to last week:  Feeder steers 550-600 lbs steady to 5.00 lower, 600-650 lbs mostly 5.00 to 7.00 lower, 650-700 lbs 2.00 to 6.00 lower, 700-800 lbs steady to 2.00 lower, 800-850 lbsunevenly steady, 900-1000 lbs 7.00 to 10.00 lower. 

    Tri-State Livestock Auction Market - McCook NE
    Receipts:  2360    Last Week:  3610    Year Ago:  0
    Compared to last week, steers and heifers were steady - 4.00 higher, except steers weighing 850, were 3.00 lower. Demand was good on all offered. Steers accounted for 57 percent and heifers 43 percent of the offering. Weights over 600 lbs 69 percent and weigh cows and bulls.

    Winter Livestock - La Junta CO...
    Receipts:  7585    Last Week:  8010    Year Ago:  1656
    Compared with last Tuesday: Steer calves under 700 lbs steady to 2.00 higher. Heifer calves under 500 lbs steady to 1.00 higher, 500 to 700 lbs 1.00 to 3.00 higher. Yearling feeder steers steady to 2.00 lower. Yearling feeder heifers 
    mostly steady.

    Russell Wtd Avg Feeder Cattle Auction - Russell IA
    Receipts:  3920    Last Week:  5322    Year Ago: No Sale- ICE
    Compared to the sale last week: Feeder strs mostly 1.00-3.00 lower and feeder hfrs mostly 1.00-2.00 lower. Trade Active and Demand Moderate today. Receipts this week included 72 percent feeder cattle over 600 lbs; 68 percent of the feeders were strs and 32 percent were hfrs. 

    Green Forest Livestock Auction - Green Forest AR
    Receipts:  276    Last Week:  623    Year Ago:  1016
    Compared to one week earlier, slaughter cows unevenly steady, slaughter bulls steady, feeder bulls, feeder heifers, feeder steers, and bull calves lightly tested, heifer calves steady, steer calves lightly tested, bull calves steady, replacement cows lightly tested. 

    Clovis Livestock Auction - Clovis NM
    Receipts:  2595          Week Ago:  4278       Year Ago:  2137
    Compared to last week:  Feeder steers and heifers mostly 3.00-6.00 higher, instances 7.00-15.00 higher on 300-400 lb heifers and 700-800 lb heifers though quality more attractive.  Slaughter cows 3.00 higher; bulls steady on limited 
    receipts.

    Oklahoma National Stockyards - Oklahoma City, OK
    Receipts           Week Ago             Year Ago
      8,292                12,217                  2,736
    ** Add Close Correction on 750-800 lb Steers and update with actual receipts***Compared to last week:  Feeder steers traded 2.00-6.00 lower, feeder heifers 600-800 lbs. steady to 3.00 lower, 800-1000 lbs. 4.00-6.00 lower. Steer calves brought steady to 2.00 lower, heifer calves 1.00-5.00 lower.

    Cullman Stockyard - Cullman AL
    Receipts:  1002    Last Week:  000    Year Ago:  1397
    Compared to last market covered: Slaughter cows and bulls sold steady to 2.00 higher. Feeder bulls and steers sold to 2.00 higher. Feeder heifers sold steady. Replacement cows and pairs sold steady. 

    Toppenish, WA Livestock Auction - Toppenish WA
    Receipts:  1675    Last Week:  2140    Year Ago:  2000
    Compared to last Thursday at the same market, stocker and feeder cattle steady to 3.00 higher in a light test. Trade active with good demand for all classes. Slaughter cows steady to firm. Slaughter bulls 3.00-4.00 higher. 

    Blue Grass South Livestock Market - Stanford KY
    Receipts:  107    Last Week:  145    Year Ago:  624
    Compared to last Monday:No comparison due to limited supply. Feeders-68,Slaughter-37,Replacements-2 Supply included 22 percent over 600 lbs and 31 percent heifers.

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    Direct Sales of Feeder & Stocker Cattle:
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    WY, Western NE & Western Dakotas Direct Feeder Cattle Wtd Avg (Fri)
    Receipts: 2,440     Week Ago: 2,874    Year Ago: 1,467
    Compared to last week, 800 lbs steers sold steady. Not enough comparable heifers for a market trend. Demand was good as the CME posted good gains in mid-week trading letting hedgers to procure a few loads of cattle.

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

    IA-South MN Direct Feeder Cattle Weekly (Mon)
    Receipts:  0    Last week: 0     Last Year:  81
    Compared to the last report:  Feeder steers and heifers not  tested.  Prices based on net weights FOB after a 3 percent shrink or equivalent and 5-10 cent slide on calves and 4-6 cent slide on  yearlings from base weights. 

    Eastern Cornbelt Direct Feeder Cattle Summary (Fri)
    This week: 1,612      Last week: 270      Last Year: 140
    Compared to last week:  Not enough current FOB delivered cattle last week for an accurate market trend.  Supply included 100 percent over 600 lbs; 78 percent heifers.  Prices based on net weights FOB after a 3 percent shrink or equivalent and 5-10 cent slide on calves and 4-6 cent slide on yearlings from base weights.

    Colorado Direct Feeder Cattle Report (Fri)
    Receipts: 5,065        Last Week 3,986        Last Year 4,316 
    Compared to last week:  Feeder steers and heifers traded with a higher undertone compared to last week’s limited offerings. an accurate market trend.  Demand light to moderate.  Supply consisted of 100 percent over 600 lbs; 25 percent heifers. 

    Kansas Direct Feeder Cattle Summary (Fri)
    Receipts:  2,027          Last Week: 1,481         Last Year 2,310 
    Compared with last week: No comparable FOB trades from last week for an accurate market test, however a firm undertone is noted. Volume includes 100 percent 600 lbs and over.  Feeder supply includes 77 percent steers and 23 percent heifers.

    Montana Direct Feeder Cattle Wtd Avg (Fri)
    Receipts: 520          Last Week 685          Last Year 557 
    Compared to last week:  No test for feeder Steers and heifers.  Supply includes 100 percent over 600 lbs and 89 percent heifers. Unless otherwise stated prices are FOB weigh point with a 2-3 percent shrink or equivalent and with a 8-12 cent slide on calves and 4-8 cent slide on yearlings from base weights.

    New Mexico Feeder Cattle Report (Mon)
    Receipts:  2600    Last Week:  2800    Year Ago:  2200
    Compared to last week:  Not enough comparable sales of Current FOB steers or heifers for a market trend.  Trade activity was slow to moderate on moderate demand.  Supply consisted of 98 percent steers and 2 percent heifers.

    Northwest Wtd Avg Direct Feeder Cattle Report (Fri)
    Receipts:  2,566    Last Week:  1,519    Year Ago:  2,200
    Compared to last week:  Feeder steers lightly tested with last week few sales steady to 6.00 higher.  Feeder heifers 1.00-3.00 higher.  Some cattle at the lower end of the price range were contracted early in the trading period.

    Oklahoma Direct Feeder Cattle (Fri)
    Receipts: 1,298        Last Week 3,342        Last Year 5,087 
    Compared to last week:  Feeder steers and heifers lightly tested again this week on a Current FOB Basis, however a higher undertone was noted.  Receipts this week consisted of 100 percent over 600 lbs and 76 percent heifers.

    Texas Direct Feeder Cattle (Fri)
    Receipts:  27,100    Last Week:  19,900    Year Ago:  36,700
    Compared to last week:  Current FOB sales of steers and heifers traded unevenly steady.  Trade was active on good demand.  The CME feeder cattle futures regained footing throughout the trading week as prices closed in the green. 
     

  • Extensive U.S. & Canadian Auction Results are available on The Cattle Range
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    Representative Sales of Cows & Pairs:
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    Reported by.USDA Market News for the week ending January 19th
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    • McAlester, OK:
      • Replacement Cows:  Medium and Large 1-2 1-6 yr old 1350-1635 lb cow 4-8 months bred 1300.00-1425.00; 7-8 yr old 900-1350 lb cow 6-8 months bred 1075.00-1210.00 per head. 
      • Pairs:  Medium and Large 1-2  5-8 yr old 1200-1400 lb cow w/100-275 lb calf 1225.00-1325.00 per pair. 
    • Oklahoma City, OK:
      • Replacement Cows:  Medium and Large 1-2  2-4 yr old 850-1300 lb cow 3-7 months bred 700.00-1150.00; 7-10 yr old 1025-1550 lb cow 6-7 months bred 700.00-950.00 per head. 
      • Pairs:  Medium and Large 1-2 pkg 7 yr old 1200 lbs black cow w/200 lb calf 1225.00 per head. 
    • Salina, KS:
      • Bred Cows:  Medium and Large 1  1005-1230 lbs 6-9 months bred 1535.00-1800.00.  Medium and Large 1-2  845-1060 lbs 6-9 months bred 1100.00-1460.00 all per head.  Second Calf to Solid Mouth:  Medium and Large 1 Middle-Aged 1235-1300 lbs 6-9 months bred 1760.00-2035.00.  Medium and Large 1-2 Middle-Aged 1165-1295 lbs 3-6 months bred 1350.00-1610.00; 1240-1300 lbs 6-9 months bred 1500.00-1650.00.  Large 1 Middle-Aged 1305-1470 lbs 6-9 months bred 1750.00-2060.00.  Large 1-2 Middle-Aged 1310-1530 lbs 3-9 months bred 1250.00-1675.00; 1600-1635 lbs 6-9 months bred 1375.00-1600.00 all per head.  Short Solid to Broken Mouth Cows:  Medium and Large 1-2 Aged 1255-1290 lbs 6-9 months bred 840.00-950.00.  Large 1-2 Aged 1350-1700 lbs 6-9 months bred 835.00-1100.00 all per head. 
      • Pairs:  Medium and Large 1 Middle-Aged 1105-1190 lb cow w/150-200 lb calf 1860.00-1950.00.  Medium and Large 1-2 Middle-Aged 945-1150 lb cow w/150-200 lb calf 1460.00-1700.00 all per head. 
    • Roswell, NM:
      • Replacement Cows: Medium and Large 1-2 Young 855-1263 lb cows 3-8 months bred 700.00-1125.00, per head; middle aged 805-1430 lb cows 3-8 months bred 560.00-775.00, per head; aged 850-1265 lb cows 3-8 months bred 585.00-800.00, per head. 
      • Cow/Calf Pairs:  Medium and Large 1-2 Middle aged pkg 1075 lbs w/100-150 lb calves 1075.00, per pair; aged indiv 1000 lb cow w/225 lb calf 975.00, per pair. 
    • West Plains, MO:
      • Bred Cows:  Medium and Large 1-2  2-7 yr old 1062-1705 lb cows in the 2nd-3rd stage 1050.00-1375.00 per head; 1st stage 900.00-1025.00 per head. Short-solid mouth 1055-1450 lb cows mostly in the 3rd stage 825.00-975.00 per head. Medium and Large 2  2-6 yr old 865-1230 lb cows in the 1st-3rd stage 700.00-900.00 per head; Short-solid to broken mouth 1060-1275 lb cows mostly in the 3rd stage 650.00-750.00 per head. 
      • Cow-Calf Pairs:  Medium and Large 1-2  3 yr to short-solid mouth 890-1775 lb cows with 200-250 lb calves 1325.00-1450.00 per pair, 3-n-1 pkg 2 yr old 1085 lb cow in the 2nd stage with 350 calf 1550.00 per pair.  Medium and Large 2  2-5 yr old 1020-1115 lb cows with 125-150 lb calves 950.00-1150.00 per pair; Short-solid to broken mouth 975-1085 lb cows with 125-150 lb calves 850.00-950.00 per pair. 
    • Valentine, NE:
      • Bred Cows:  Medium and Large 1 “AI” bred heifers in 2nd and 3rd trimester 1068-1082 lbs 1625.00-1625.00; 1101-1186 lbs 1500.00-1975.00; 1211-1200 lbs 1975.00; 1300 lbs. Bull bred heifers in 2nd and 3rd trimester 962-990 lbs 1400.00-1450.00; 1000-1099 lbs 1400.00-1800.00; 1116-1182 lbs 1450.00-1875.00; 1234-1257 lbs 1775.00-1860.00.  Young: 2nd and 3rd trimester 1083-1195 lbs 1650.00-2050.00; 1204-1298 lbs 1450.00-1900.00; 1307-1381 lbs 1400.00-1675.00; 1452-1480 lbs 1575.00-1600.00; 1501 lbs 1625.00; 1st trimester 1255 lbs 1600.00.Solid Mouth:  2nd and 3rd trimester 1113-1190 lbs 1100.00-1300.00; 1234-1280 lbs 1500.00-2025.00; 1328-1393 lbs 1200.00-1925.00; 1405-1469 lbs 1500.00-1575.00; 1535-1564 lbs 1275.00-1525.00; 1st trimester 1413 lbs 1300.00. Short Solid Mouth 2nd and 3rd trimester 1200-1256 lbs 900.00-1100.00; 1437-1400 lbs 1075.00. Broken Mouth 2nd and 3rd trimester 1225-1290 lbs 1000.00-1025.00; 1300-1323 lbs 975.00; 1410-1400 lbs 1025.00. 
    • La Junta, CO:
      • Replacement Stock: Medium and Large 1 Young 1200-1290 lbs 1700.00-1750.00, May calvers half load fancy 1225 lbs 1700.00; middle age 1300-1565 lbs 1200.00-1400.00, mostly 1275.00-1375.00, May calvers 1220-1375 lbs 1150.00-1250.00, summer calvers 850.00-925.00; aged short solid mouth 1215-1490 lbs 900.00-1050.00, broken mouth 1100-1535 lbs 800.00-900.00, May calvers 700.00-825.00.  Medium and Large 1-2 Young 1200-1350 lbs 1425.00-1500.00; middle age 1450-1565 lbs 1050.00-1175.00; aged 1100-1225 lbs 650.00-775.00. 
    • Riverton, WY:
      • Bred Cows: Medium-Large 1 Heifers reputation quality packages 860-1095 lbs 1425.00-1585.00, several 730-1160 lbs 1000.00-1385.00, few 825.00-975.00; Young couple reputation quality packages 1035-1160 lbs 1850.00-1900.00, mostly 870-1420 lbs 1300.00-1585.00, several 1000.00-1250.00, few 725.00-925.00, longhorns) 980-995 lbs 460.00-525.00; Middle Aged (Short Solids) 1105-1325 lbs 1200.00-1350.00, few 925.00-1175.00; Aged (Short Term) reputation quality 1135-1610 lbs 900.00-1100.00, several 725.00-875.00, few 625.00-710.00 all per head. 
      • Cow/Calf Pairs: Medium-Large 1 Young 1085-1315 lb cows with 125-150 lb calves 1250.00-1300.00, individual 1210 lb cow with 125 lb calf 1000.00; Aged (Short Term) 1260 lb cow with 220 lb calf 910.00 all per pair. 
    • Arkansas:
      • Replacement Cows:  Medium and Large 1-2  2-7 year old 850-1250 lbs 2nd-3rd stage 88.00-98.00/950.00-1050.00, first stage/open 67.00-77.00, 7-10 year old 2nd-3rd stage 51.00-61.00/725.00-825.00 per head. 
      • Cow-Calf Pairs:  Medium and Large 1-2  3-7 yr old 800-1200 lb cow w/100-200 lb calf 1100.00-1200.00, few to 1500.00; w/200-300 lb calf 1325.00-1425.00. 
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    Canadian Cattle:
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    Alberta Beef Producers: Alberta direct cattle sales Thursday saw light trade develop with dressed sales ranging from 272.00-276.00 delivered. Initial sales are 3.00-6.00 lower than last week. All the cattle that traded this week would be lifted in 1-2 weeks. Cash to futures basis levels did weaken this week but still remain historically strong. For the most part this week's cash offering has been clean up. 
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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 $0.7970 U.S. dollars
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    Prices for the week ending January 12th:
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    The "Nord Fork"

    Replaces Flankers at Branding
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    JBS Sells Five Rivers Cattle Feeding
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    JBS S.A. announced Jan. 17 that its subsidiary, JBS USA Food Co., has entered into an agreement to sell the totality of Five Rivers Cattle Feeding's feedlot operations in the U.S. to affiliates of Pinnacle Asset Management LP for approximately $200 million, including the market value of silage and grain inventories at closing, and subject to adjustments by working capital variation also at closing. Coupled with the acquisition of Five Rivers U.S. shares, Pinnacle also agreed to sign a long-term contract to supply cattle to JBS in North America.

    JBS said the conclusion of the transaction is subject to the usual regulatory approvals and adjustments, including corporate approvals, the buyer securing the relevant funding and approval by U.S. antitrust authorities.

    The company also said it will use a portion of the proceeds to further reduce debt in Brazil, subject to its stabilization agreement.

    Five Rivers Cattle Feeding is the largest cattle feeding operation in the world, with roots in the U.S. dating back to the 1920s. The transaction includes 11 feedyards across Arizona, Colorado, Idaho, Kansas, Oklahoma and Texas, with a feeding capacity of more than 900,000 head of cattle, and a long-term agreement to supply cattle to JBS USA beef processing plants. The current Five Rivers management team will remain in place, led by president and chief executive officer Mike Thoren, to ensure business continuity and build upon Five Rivers’ strong track record of innovation and stewardship.

    “The sale of the Five Rivers Cattle Feeding assets and farms is a strategic move that will allow JBS USA to more efficiently deploy working capital and focus on the company’s core food and value-added products businesses,” said Andre Nogueira, CEO of JBS USA. “The transaction concludes the divestment program previously announced and unanimously approved by the JBS S.A. board of directors and more favorably positions the company for future opportunities.”

    He continued, “The long-term partnership with Pinnacle will ensure JBS USA’s continued ability to produce high-quality beef products -- including natural, certified humane, raised without antibiotics, source-verified and traditional products -- enjoyed by customers and consumers around the world.”

    Jason Kellman, managing partner and chief investment officer of Pinnacle, said the acquisition strengthens Pinnacle's strategic path of investment and development of its global, diversified physical commodity platform. “We are excited to work closely with our operating partner, Arcadia Asset Management, and strategic partner, Ospraie Management, to support Five Rivers’ talented management team,” he said.

    JBS divestment update

    The announcement was made as part of an update on the progress of the company’s divestment program, wherein JBS said the sale of the majority of the assets comprised by the divestment program was concluded in 2017.

    On July 14, 2017, the company entered into an agreement to sell the Five Rivers Cattle Feeding feedlot operations in Canada for $50 million (Canadian; approximately $40 million U.S.). On Sept. 11, 2017, Moy Park was sold to Pilgrim's Pride Corp., which is controlled by JBS, for approximately £1.0 billion (enterprise value). On Oct. 26, 2017, JBS concluded the sale of its shareholding interest in Vigor Alimentos S.A. for approximately 1,112 million reals (enterprise value). These transactions were in addition to the sale of JBS's beef operations in Argentina, Paraguay and Uruguay, which were closed on July 31, 2017, for $300 million (U.S.) plus price adjustment after closing.

    JBS said a substantial portion of the proceeds received from these asset sales was used to make extraordinary debt amortization. As a result of the divestment program and the robust cash generation during the period, the company's leverage ratio (net debt-to-EBITDA) decreased significantly from 4.16x at the end of the second quarter of 2017 to 3.42x at the end of the third quarter of 2017.

    The company said the results reached in 2017 “clearly demonstrate a successful implementation of the divestment and deleveraging strategy defined by management.”

    "JBS has been strengthened by this divestment process and has increased liquidity. We were able to sell the assets for the value we expected, while cash generation has been very strong during the period," JBS CEO José Batista Sobrinho said.

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    Will Cattle Futures See a Bull Market in 2018? 
    AgriMoney
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    Cattle futures fared better in 2017 than feared by many investors, who had worried that a rebuild in the US herd would, in easing supply tightness, depress prices.

    However, with stronger-than-expected exports as well as US demand mopping up extra beef supplies, Chicago futures in live (ie finished) cattle recovered from late-summer stumble to end the year up 2.1%.

    (This albeit after a tumble of 28% over the previous two years, as herd rebuilding kicked in.)

    And, with feedlots clamouring for animals to fatten and meet this demand, feeder cattle futures fared even better, adding 11.9% over 2017, after a 41% plunge during 2015 and 2016.

    Will strong demand continue to win out in 2018? Or will extra supply, following feedlot’s splurge on feeder cattle, dampen prices ahead?

    Top commentators give their outlooks...

    Mike Zuzolo, Global Commodity Analytics

    “One major feature I have noticed the past couple years in the commodity trade, if fundamentals are ‘sloppy’, meaning that demand is not outpacing supply, fund flows can create greater price volatility.

    “I believe this could be one of the key features of the 2018 livestock market. This means that, unless we see a reduction of dressed weights, downside potential could be larger than normal at times.

    “For this reason, it’s important to lock?in profit for cattle, feeders, and hogs when profit presents itself.

    “The USDA expects that beef production will consistently build into the July-to-September quarter, which pulls [cash] prices down from $120 per hundredweight, toward $115 per hundredweight.

    “I would disagree that ‘we’ve already factored?in a lot of price negativity’ - unless Nafta does get torn-up.

    “If Nafta gets dropped, it is going to be very difficult to maintain a sufficient supply of both live cattle and beef given the high amount we import from both Canada and Mexico.”

    Goldman Sachs

    “With several consecutive months of greater than 10% year-on-year [growth in] feedlot placements and cattle feedlot inventory now well above long-term averages, we believe slaughter availability will be very healthy in the first half of 2018, particularly after taking into account the marginal re-acceleration in heifer slaughter.

    “With these figures suggesting bearish supply trends, we believe near-term US beef exports and domestic demand will be critical to balancing the short and medium term beef supply and demand picture, particularly following a robust 2017 export programme.

    “Our stronger global growth forecasts for 2018-19 foresee this strong export demand trend continuing.

    “But on balance, we maintain a moderately bearish view, and continue to see prices at 110, 100 and 100 cents a pound in 3, 6 and 12 months respectively.”

    Rabobank

    “US beef cow numbers are expected to expand in 2018, but at a much slower pace than the previous three years.

    “Beef production in 2018 is expected to increase by 3%, largely driven by an increase in carcass weights.

    “The underlying structure of the market appears to be solid for 2018 – available cattle supplies with modest growth, ample and affordable feed grains, and sold domestic and export demand for US beef.

    “But there are risks to consider – any indications of a slowing economy, either domestic or global, a strengthened US dollar, and the uncertainty surrounding US trade agreements with Nafta, South Korea and Japan.”

    Societe Generale

    “A recovery in live cattle prices has led to a sharp decline in meatpacker margins from the beginning of November which could have a negative impact on demand for cattle.

    “Feedlot margins have also remained near breakeven level due to higher feeder cattle prices.

    “According to our estimates, the breakeven price of feeder cattle for feed yards is about 155 cents a pound, just above the current feeder cattle price.

    “Weakness in live cattle prices due to weak demand from meatpackers could further tighten feed-yard margins leading to lower demand for feeder cattle from feed yards in 2018.

    “Hence, we are slightly bearish on feeder cattle and largely neutral on live cattle prices for 2018.”

    “We expect beef prices to remain range-bound at $190-215 per hundredweight as we anticipate an increase in beef supply in 2018.

    “We expect strong demand to continue to lend support to beef prices at near $190 per hundredweight.”

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    Canada's Beef Checkoff Will More Than Double 
    Canadian Cattlemen
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    Most Canadian beef producers will be kicking in another $1.50 per marketed head to the Canadian Beef Cattle Check-Off starting at some point in 2018, with the long overdue increase in funds being used to further marketing and research efforts for the industry.

    The national check-off, which hasn’t changed in about 20 years, will increase from $1 per head to $2.50 per head, says Melinda German, general manager of the check-off agency. Most of the agreements with provincial beef industry associations, approving the increase are in place, she says, with three yet to be finalized.

    German says while the national check-off generates about $7.5 million annually now, in real terms the “buying power” of the initial $1 levy created in the late 1990s provides a 70 cent dollar.

    Alberta beef producers, for example, in 2017 paid a total $3 per head check-off with two of those dollars going to the provincial Alberta Beef Producers, and $1 going to the national check-off. Starting in April 2018, Alberta ranchers will be paying a total of $4.50 per head, with $2 still going to ABP and the new $2.50 amount going to the national check-off.

    The Alberta national check-off collected about $3.8 million in 2017, Saskatchewan just under $1 million, Ontario $896,000, Quebec about $887,000, B.C. about $235,000. In Atlantic Canada, New Brunswick $17,000, P.E.I. about $15,000 and Nova Scotia $8,200.

    Six of nine provinces have all agreements in place for a 2018 start, German told delegates attending the recent Alberta Beef Producers annual general meeting in Calgary. In fact, Nova Scotia and P.E.I. producers are already paying the increased check-off. Manitoba, Saskatchewan and Alberta producers will start in April 2018, with B.C. to follow in July, 2018.

    Ontario beef producers are close to finalizing their agreement. Quebec is committed to have their agreement in place at some point in 2018. And after a legal delay, New Brunswick is working on its agreement.

    The need to increase the check-off was approved collectively by all provincial beef industry associations about four years ago. It was all part of developing a Canadian National Beef Strategy needed to improve marketing and research efforts to keep the industry moving forward, German says.

    Producing and marketing beef in the world is a competitive business with some big players. Canada’s national check-off collects between $7.5 and $8 million annually, compared to Australia which collects about $106 million, New Zealand collects about $10.5 million and the U.S. about $40.5 million.

    Canada’s national check-off is spent in three key areas -- market development, research and promotion. There’s also an option to direct money to provincial initiatives. Money for marketing and promotions goes to Canada Beef, while the research dollars go to the Beef Cattle Research Council. German emphasized that it is provincial beef associations that directs the agency on where they want their national check-off money used.

    For example, B.C. wants 90 per cent of its national levy spent on market development with 10 per cent to research, Alberta directs 80 per cent to market development and 20 per cent to research. Saskatchewan goes for a 70/30 split, while Manitoba wants 85.5 per cent spent on marketing, seven per cent on research and 7.5 per cent on provincial initiatives.

    Eastern provinces lean the other way. Ontario wants 32.6 per cent spent on marketing, 17.4 per cent on research and 50 per cent on provincial initiatives. Quebec, New Brunswick, Nova Scotia and P.E.I. have all earmarked anywhere from 88 per cent to 98 per cent of the national check-off to provincial initiatives.

    As the new $2.50 check-off comes into effect with each province, the provincial associations have a one-time chance to reallocate how they want the national levy used.

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    USDA National Retail Beef Report:
    Advertised Prices for Beef at Major Retail Supermarket Outlets
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    This week in Beef Retail, the Feature Rate fell by 5.3 percent, the Special rate was 1.7 percent lower,
    and the Activity Index posted a 9.1 percent decrease. Cuts from the chuck rmaintain a strong presence as its appealing to consumers during the winter months for versatility for roasting. Chuck had the most ad space this week as the Rib, Round, Loin, Brisket, and Ground Beef all saw less ad space when compared to last week. Cattle Slaughter under federal inspection was 0.7 percent higher when compared to a week ago.
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    Cargill Makes a Move into Plant-Based Protein 
    MeatingPlace.com
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    Cargill announced it has signed a joint venture agreement with Puris, the largest North American producer of pea protein, increasing the agricultural giant's footprint in the growing market for plant-based protein sources.

    "Puris is a game changer in terms of taste and vertical integration in pea protein," said David Henstrom, vice president, Cargill Starches, Sweeteners and Texturizers. "It's clear that Puris is in alignment with Cargill's vision to meet the growing demand for protein globally and to help customers deliver label-friendly products without sacrificing taste."

    Cargill's financial backing and market reach will drive significant expansion of Puris’ operations globally, said Puris President Tyler Lorenzen.

    “We will add substantial capacity, including a second plant, while maintaining our focus on U.S. production," Lorenzen said. "Cargill is investing in everything PURIS stands for, from our vertically integrated non-GMO pea seed development to our proprietary technologies and our commitment to U.S. Certified Organic pea farmers."

    The announcement comes just months after Cargill invested an undisclosed sum in Memphis Meats, a company that has developed beef, chicken and duck protein from animal cells.

    Cargill joins other large meat companies that are investing in alternative protein sources. Tyson Foods in 2016 acquired a 5 percent stake in plant-based meat alternative maker Beyond Meat and boosted its stake last month.

    In September 2017, Nestle USA bought Sweet Earth, a manufacturer of plant-based burritos, burgers and other foods.

    In February 2017, Canadian meat processor Maple Leaf Foods agreed to acquire Lightlife Foods, a manufacturer and brand of refrigerated plant-based protein foods in the United States, for $140 million and related costs.

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    Photo of the Week:
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  • 109 Angus & BWF Bred Heifers... S. Central CO*.
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    "Shootin' the Bull" Weekly Analysis:
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    In my opinion, a stigma was lifted from the cattle industry this week with the announcement that Pinnacle Asset Management purchased JBS Five Rivers lock, stock, and barrel.  Were JBS to have to divest and sell the entities for potentially pennies on the dollar, it could have been a difficult task for the industry to absorb.  Instead, with Pinnacle's commitments to run JBS Five Rivers, this issue has been laid to rest.  While note that I did not say this was market friendly, it is industry friendly.  However, it does lead me to anticipate a firm tone to have been set now as this large portion of the feeding industry will be anticipated to start hitting on all eight cylinders soon. 

    Gains this week in futures have nearly erased the "falling off a cliff" look that futures took on after the January 4th high.  I noted this week on commentaries that this pattern has a tendency to see traders push prices back up the cliff, they just fell from.  At Friday's high, there was only a $1.32 left before reaching the previous summit.  The retracement on Friday is perceived as backing up for a running start next week.  Exports were excellent this week.  Domestic demand is anticipated to continue as nothing appears to have changed the discretionary spending habits of the consumer.  Of interest this week was that the price of money increased.  Bond prices set a new contract low this week, pushing interest rates higher.  This is anticipated to impact expansion as the price of money has to be factored into purchases of cows or heifers.  Especially since sales of calves are few and far between, unlike other sectors of the industry.  I recall having stated this before, but if you need to borrow money or wrap up interest rates, I recommend the sooner the better. 

    Feeder cattle is where the action is and will be for sometime to come.  On Thursday, I made the recommendation to buy any month feeder cattle contract, except January, with a sell stop to exit only at just under the low posted on January 17th per respective contract month.  **This is a sales solicitation.**  Potentially, JBS will be seen more at sale barns and video sales now that the purchase is complete.  While this is perceived as a fundamental change in the industry, the bigger impact to deal with is the huge swing in the basis from positive to negative.  Significant advantage has been lost by feed yards with this reversal.  Merely 10 trading days ago, yard managers could have secured as much as a $13.00 positive basis to the March and even as much as $5.00 to $8.00 using options.  Today, they now have to go to spot to buy feeders the cheapest.  I anticipate the basis to continue to be more on the negative side than positive. 

    This should help backgrounders immensely. Previously they had to market inventory on the spot market to achieve the highest price.  Sometimes this meant selling lighter animals.  Now, with the basis even or negative, they can sell the futures for the same price or higher and grow the cattle to the expiration of the futures contract.  They have taken no less money at the time of transaction and allowed further gains in weight to transpire.  Feed yards that once could use the weaker futures to promote an even wider basis when cash forward contracting, won't have the same bargaining power.  Technical indicators turned up this week in the feeders.  Like the fats, they are nearing the January 4th high.  A trade above this will produce further confirmation of a reversal.  Next week will be full of fire and brimstone as traders will jockey hard before the on feed report.  Were it to reflect further placements of under 700# it will make for a significant tighter feeder supply for those not involved in vertical integration.  Were it to finally begin to show a decline in placements, there is no telling what may happen then.  I know the first argument will be that '17 placements were so high that of course the '18 placements won't be able to match them.  This may be so, but regardless, it is fewer animals. 

    I continue to see further evidence of elevated exports, sourcing of food by China, and world economies improving.  The price of money is rising suggesting that the economy is running smoothly.  Employment and wages have increased some inflationary pressures on certain items.  Primarily the day to day things of food and energy take center stage.  This is viewed as just an increase in the quality of life.  With the JBS issue behind the market, supply well known by all, and what appears to be healing world economies, I perceive the likelihood of going into a bear market has been further reduced. 

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

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

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    Hay Stocks Down 10%
    CME Group
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    The USDA-NASS monthly Crop Production report (released January 12, 2018) contained their survey-based hay stocks as of December 1, 2017. At 86.2 million tons nationally, hay stocks were smaller than expected. U.S. stocks were 10% below a year earlier and the lowest since December 1, 2012, when severe drought limited hay production and increased late summer and fall usage. Note that the December 1, 2017, stock level was the second lowest since 1976. 

    Year-over-year declines in stocks were associated with states impacted by drought, wildfires, and hay destroyed by hurricanes (flooding). The arctic air mass that settled over much of the U.S. , and in recent weeks even brought significant snow to southern states, has likely caused much more hay to be fed to beef cattle than typical. That combined with a cowherd that is larger than a year ago resulted in the Livestock Marketing Information Center (LMIC) estimate of U.S. hay stocks to begin the newcrop year (as of May 1, 2018) as the smallest since May 1, 2013.

    National alfalfa hay prices have posted year-over-year increases since the current crop-year began last May, and in November averaged $148.00 per ton, up $18.00 year-over-year (latest data available per NASS Agricultural Prices report). As of November, NASS reported the national “Other Hay” price was $118.00 per ton, down $2.00 from a year earlier. Hay price increases compared to 2017’s are likely this year. Helping keep a lid on hay prices are the values of other feedstuffs which are depressed (soybean meal, corn, etc.). NASS reported new U.S. alfalfa seedings during 2017 were below 2016’s (down 3%). With normal growing conditions in 2018, U.S. hay production should increase compared to 2017’s. Still, total supply (May 1 stocks plus 2018 production) looks to remain historically tight, especially against a backdrop of more cattle.

    That suggests higher national average hay prices well into 2018. Of course, hay is a very regional crop, so not all states may see price gains. The LMIC projects that the national All Hay price in 2017/18 will average about $135.00 per ton, up $5.50 (about 4%) year-over-year. For the 2018/19 cropmarketing year, the preliminary LMIC forecast is for the
    national All Hay price averaging just over $150.00 per ton, the highest since 2014/15 ($172.00). Farmers that sell hay, especially high-quality types, may find that crop to be one of the few turning a profit in 2018.

    From a livestock market perspective, feedstuffs overall are likely to remain abundant in 2018. But, for the cattle business, an eye on overall forage conditions is important. Hay is a key cattle feed and any impacts of drought in 2018 on pastures and/or hay production would be magnified by limited carry-over stocks, and could even cause some regional breeding herd adjustments.

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

    The average value of hide and offal for the five days ending Fri, Jan 19, 2018   was estimated at 10.63 per cwt., down 0.08 from last week and down 1.32 from last year.

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    Documents Allege Imported Beef Being Mislabeled
    .
    Court Documents Allege Hundreds of Millions of Pounds of Imported Beef Likely Being Mislabeled as Product of USA

    In court documents filed Friday, ranch groups R-CALF USA and the Cattle Producers of Washington (CPoW) reinforced their allegation that the U.S. Department of Agriculture (USDA) is unlawfully helping multinational meatpackers mislabel hundreds of millions of pounds of imported beef as "Products of the USA."

    In their lawsuit filed in June against the USDA and Agriculture Secretary Sonny Perdue, the groups claim the Tariff Act of 1930 requires imported beef to bear a label denoting the foreign country-of-origin of the beef all the way to the consumer, unless the beef undergoes a substantial transformation in the United States.

    The Secretary disagrees, arguing in his earlier-filed court documents that imported beef is to be deemed and treated as domestic beef so long as the importing country's food safety standards are equivalent to U.S. standards. Consequently, the Secretary allows multinational meatpackers to label imported beef as "Products of the USA" even if the imported beef receives only minor processing, such as unwrapping and rewrapping the package.

    Evidence submitted by the groups indicate that U.S. cattle producers received higher prices for their cattle when the origins of foreign beef were distinguished in the marketplace. Evidence attached to Friday's filing supports the groups' contention that proper enforcement of the Tariff Act would require hundreds of millions of pounds of foreign beef that can currently be labeled as "Products of the USA" to bear country-of-origin labels. This, the groups argue, would turn market forces "in favor of true domestic producers."

    Friday's filing also claims the Secretary's failure to enforce the Tariff Act is flooding the U.S. market with mislabeled foreign beef that decreases the market leverage and income of U.S. cattle producers.

    R-CALF USA CEO Bill Bullard says the Secretary's refusal to enforce the Tariff Act's labeling requirements undermines the President's longstanding "Buy American" campaign and the more recent initiative to increase agriculture output that is "Made in America," as advertised in the Secretary's recently unveiled rural task force report.

    "It is disingenuous for the Administration to say it is encouraging consumers to buy American while it simultaneously directs its legal team to defend the multinational meatpackers' fraudulent practice of putting a USA label on imported beef," Bullard said.

    Attorneys representing the ranch groups include lead counsel David Muraskin of Public Justice, Beth E. Terrell and Blythe H. Chandler of Terrell Marshall Law Group PLLC, and J. Dudley Butler of Butler Farm & Ranch Law Group, PLLC.

    –R-CALF USA

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    NAFTA Notes and a Warning
    Free Market Reflections with Steve Dittmer
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    January 2018. The global economy is improving. The U.S. economy, drawing on Trump optimism, anticipated tax reform and more competitive American businesses seeing some profits, which should benefit Canadian businesses. U.S. beef demand is holding up decently in the face of increased supply.

    The 800-pound gorilla in the room is the NAFTA renegotiation. The process has stalled so badly that the top dogs just sent in the troops to battle it out in the fifth round because they didn’t want to be associated with a stalemate. The U.S. complains that Mexico and Canada did not provide counterproposals to its proposals. In response, Mexico and Canada say they are not going to counter proposals that are non-starters.

    The latest rumours are dismal. Any country that intends to pull out of NAFTA is required to give six months notice. Some speculate that President Trump will give notice and start the clock ticking to put more pressure on Mexico and Canada to capitulate. Meanwhile, most of the U.S. economy, including agriculture, is pleading with President Trump to not wreck something that needs little fixing. Some help could come from the confirmation of a free market agricultural negotiator.

    On another front, some of you may be aware of the big beef check-off fight going on in the U.S. You’d think we’d have enough challenges without starting trouble within the beef industry.  But that would require rational players on all sides and rationality doesn’t extend to all corners of our industry. I will give you some highlights to warn you: Don’t allow this to happen in Canada.

    I’m not sure how Canadians select their beef promotion board members but here, members of state beef councils are appointed by state cattlemen’s and cattlewomen’s groups or elected in statewide elections. For a time, some state groups were careless with their responsibilities. They didn’t carefully vet appointees or bother to recruit qualified candidates with association experience or a solid interest in promotion, research and consumer education to run for council elections. As a result, people with little experience or ties to cattle associations or industry promotion but with definite political agendas began permeating some state beef councils. The same thing happened at the national level, with the Cattlemen’s Beef Board (CBB). As a result board members with ties to radical political interests who were opposed to beef exports nearly completed a coup of the CBB.

    Once the coup was thwarted, two groups, R-CALF and the Organization for Competitive Markets (OCM) changed tactics.

    If you’re unfamiliar with OCM, don’t be fooled by the name. Its idea of achieving competitive markets is to use government power and anti-trust law to break up anything big -- packers, feeders, retailers, fast food chains -- and return the production chain to the mom-and-pop era of the 1940s.

    One thing these two groups do agree on is their wish to destroy the National Cattlemen’s Beef Association (NCBA) because it is a free market organization. It believes the industry should focus on satisfying consumer demand, that all sectors of the industry should be free to co-operate where possible to accomplish that goal and that free markets allow for the import and export of beef as dictated by consumer demand.

    All that is heresy to R-CALF and OCM. When they failed to change the NCBA platform from within, they decided to fix things by destroying it from the outside by attempting to eliminate the check-off.

    Since the merger of the National Cattlemen’s Association (cattle producers) and the Beef Industry Council (beef check-off promotion), the new NCBA has had two divisions: a policy division funded by dues and a promotion division that contracts with the check-off board, the CBB, to carry out the bulk of the check-off-funded promotion activities. There is an accounting firewall between the two divisions, because, by U.S. law, check-off money cannot be used to lobby or influence government policy.

    Despite having cattlemen and cattlewomen on the NCBA board, independent audits and supervisory government audits, OCM and R-CALF contend the NCBA policy division illegally uses check-off funds for lobbying efforts. OCM has sued the government, using Freedom of Information Act powers, seeking documents to prove its claims. R-CALF has brought a suit against the government and the Montana Beef Council, claiming check-off funds should not be collected by “private” organizations like beef councils.

    Both groups are particularly incensed that the beef check-off promotes beef rather than American beef or U.S. beef, fearing that Canadian-fed beef or Mexican feeder cattle might be gaining some benefit from the U.S. check-off. In the past, R-CALF has even been willing to raise questions about the safety of America’s beef supply in order to highlight what they claimed were safety problems with Canadian beef, especially during the BSE crisis.

    Now, both groups are partnering with avowed enemies of animal production to get legal and financial backing for their attacks against NCBA and the beef check-off. The Humane Society of the U.S. (HSUS) has pretty much taken over OCM, and R-CALF is working with Public Justice, an activist legal group opposing mainstream agriculture and legally representing both R-CALF and People for the Ethical Treatment of Animals (PETA).

    Beware. Industry feuds are ugly and damaging to both sides.

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    Feeder Steers/Corn Correlation:
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    Historically, the value of 25 bushels of corn is approximately equal to the price per cwt. for feeder steers.
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    Slaughter Cows & Bulls:
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    Slaughter cows and bulls sold steady to 2.00 lower with exception of the Colorado trading 2.00-3.00 higher. 

    Cutter Cow Carcass Cut-Out Value Friday was 170.10 -- Down 0.30 from last Friday. 

                     Weight       Colorado       Oklahoma     Alabama 
    Breakers  1100-1600  58.00-58.50  58.00-60.00      N/A 
    Boners     1000-1450  56.00-58.50  57.00-60.00  52.00-57.00
    Lean         1000-1300  52.00-55.00  55.00-58.00  45.00-50.00
    Bulls         1300-2500  76.00-79.00  80.00-83.00  71.00-76.00

                    # Head  Week Ago Year Ago  YTD   Year Ago
    National    7,774     7,817        8,265     43,839    35,906
    S Central  2,465     2,460        2,092     15,331    10,094
    N Central    488        762           788        2,516     2,881
    East         2,416     1,849         2,191     10,449     9,330
    West        1,073     1,218         1,627       7,379     6,525
    Midwest   1,332     1,528         1,567       8,164     7,076 


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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, January 20, 2018 was estimated at 1017.1 million lbs. according to the U.S.Department of Agriculture's Marketing Service. This was 1.9 percent lower than a week ago and 4.9 percent higher than a year ago.  Cumulative meat production for the year to date was 2.7 percent higher compared to the previous year.
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    Weekly Hay Reports: "Click" on links for detailed report
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    Weekly Feedstuffs Market Review:
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    The USDA reports feed ingredient prices for the week ending January 16, 2018 were mixed. 
    • Soybean Meal was 1.60 to 19.00 higher. Cottonseed Meal was steady to 15.00 higher.  Canola Meal was 4.60 to 14.60 higher. Linseed Meal was steady to 10.00 higher. Sunflower Meal was steady to 5.00 higher. 
    • Whole Cottonseed was mixed, 5.00 lower to 5.00 higher.
    • Crude Soybean Oil was 1 to 91 points lower. Crude Corn Oil was 315 points lower. 
    • Ruminant Meat and Bone Meal was mostly steady to 20.00 higher. Ruminant Blood Meal was steady to 40.00 higher. Feather Meal was mostly steady. Menhaden Fishmeal was not well established. 
    • Corn Hominy was steady to 4.00 higher. Corn Gluten Feed was steady to 17.00 higher. Corn Gluten Meal was mixed, 10.00 lower to 5.00 higher. 
    • Distillers Dried Grain was steady to 10.00 higher. 
    • Wheat Middlings were mostly steady. Wheat millrun was steady to 3.00 higher.
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    5 Year Bullish/Bearish Consensus Charts:
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    The theory behind the "Bullish/Bearish Consensus" indicator is when the public reaches a consensus, they are usually wrong:
    • They get too bullish after prices have risen and too bearish after they have already fallen.
    Because of this tendency, there are often extremes in opinion right before major changes in trend:
    • When the public reaches a bullish extreme, i.e., a great majority thinks prices will keep rising, then prices often decline instead. 
    • And when they become too bearish, then prices tend to rise.
    So when Public Opinion moves above the red dotted linein the chart, it means that compared to other readings over the past year, you're seeing excessive optimism. You also want to look at the absolute level of Opinion, too - if it's at 90%, then there's no question we're seeing an historic level of bullish opinion.  Watch for readings above 80% (or especially 90%) to spot those dangerous times when the public is overly enthusiastic about a commodity.

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

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    Bullish/Bearish Consensus: Cattle
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    Bullish/Bearish Consensus: Corn
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    Stock Markets & Economic News 
    T. Rowe Price 
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    INDEXES END MIXED AS EARNINGS SEASON ENTERS SECOND WEEK
    The major equity market indexes finished with modest gains for the holiday-shortened week. Stocks registered sharp gains on Tuesday, which saw the S&P 500 Index record its best one-day advance since November. Consumer staples stocks led gains within the S&P 500, while energy, industrials and business services, and real estate shares lagged. Smaller-cap stocks trailed large-caps.

    The second week of fourth-quarter earnings reports drove much of the market’s movements. Goldman Sachs fell on Wednesday after reporting mixed results, while rival Morgan Stanley rose on Thursday after beating estimates. IBM fell sharply in early trading Friday, after providing guidance that disappointed many analysts. A one-time charge related to the recent tax reform bill led to a sharp decline in earnings for Citigroup, reported Wednesday. This and other earnings declines in the financials sector led data and analytics firm FactSet to drastically reduce its estimate of overall earnings growth for the S&P 500 Index, to a decline of 0.2% versus an advance of 10% estimated the week before.

    U.S. TREASURY YIELDS RISE AS GOVERNMENT SHUTDOWN LOOMS
    The policy environment also returned to the forefront and appeared to limit the market’s gains. With federal spending authorizations set to expire on Friday evening, congressional officials scrambled to pass a bill to keep the government funded. The prospects for passage of a compromise measure that would attract enough Democratic votes in the Senate fluctuated but seemed to grow dimmer as the week progressed. The House passed a bill along party lines on Thursday, but the trading week ended without any action in the Senate.

    The prospect of a government shutdown beginning Saturday morning diminished the appeal of U.S. assets, pushing the U.S. dollar lower and Treasury yields higher. (Bonds prices and yields move in opposite directions.) Municipal bonds outperformed Treasuries, helped by restrained supply due to light issuance during the shortened holiday week. Investors continued to focus their interest on longer-dated issues, according to T. Rowe Price analysts.

    CORPORATE BOND MARKET ISSUANCE EXCEEDS ESTIMATES
    Conversely, new issuance in the investment-grade corporate bond market accelerated after the holiday weekend. By the end of trading on Thursday, total volume of close to $50 billion had hit the market, far exceeding early estimates. Banks dominated the primary calendar, but the deals were met with healthy demand. The secondary market initially saw credit spreads -- the extra yield over similar-maturity Treasuries -- expand in anticipation of pending issuance. This early widening was mostly erased by the end of the week, however.

    Sentiment in the high yield market was mixed, with investors mostly focused on new issuance. Although demand for the asset class has been generally strong, some of the new deals received tepid interest, with higher intermediate- and long-term yields putting some pressure on interest rate-sensitive issues with lower coupons. There was very little movement in spreads, although high yield funds reported modest outflows.

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    U.S. Stocks:
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    Jobless Claims Drop to 45-Year Low
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    Initial jobless claims tumble to lowest level since 1973

    The numbers: Initial U.S. jobless claims tumbled by 41,000 to 220,000 in mid-January, marking the biggest one-week decline since 2009. The number of new claims also touched the lowest level since February 1973.

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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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    Over the next 5-7 days, the active pattern over the Pacific Northwest is anticipated to continue, with heavy rains along the coastal areas from northern California up to Seattle. Farther inland, precipitation should be widespread from Washington and Oregon into Idaho and western Montana, with the greatest amounts over the panhandle of Idaho. Precipitation from the central Rocky Mountains will pass through the central Plains and into the upper Midwest and Great Lakes. Much of the eastern half of the United States is projected to receive precipitation. During this period, temperatures are anticipated to be 3 to 6 degrees below normal west of the Continental Divide and 6 to 9 degrees above normal to the east. This should help bring the snow levels down over the western United States, allowing for snow accumulation to take place.

    The 6-10 day outlooks show that temperatures are anticipated to remain cooler than normal over the western and north central United States, with the greatest probability of below-normal temperatures over Montana and Wyoming. Warmer than normal temperatures are projected over much of the eastern third of the country, with the greatest chances of above-normal temperatures along the eastern seaboard from Florida north into New England. The probability of above-normal precipitation is great over much of the United States outside of the desert Southwest. The highest chances of above-normal precipitation are over the Great Basin and lower Mississippi Valley.

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    Beef & NAFTA Trade Issues
    Ag Center Cattle Report 
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    Parsing the beef trade issues with our two trading partners, Mexico and Canada, is not easy work nor does it lend itself to simple analysis. We have always relied on both Mexico and Canada for sourcing live supplies of cattle and in return have benefitted from sales of our processed beef to both countries in excess of what we buy from them. The results in 2017 have changed some of those numbers and we thank the Daily Livestock Report at the CME for the following data from 2017. 

    The US beef trade balance with NAFTA has turned negative in recent years. The US has always been a large net importer of cattle from both Mexico and Canada. Almost all Mexican cattle coming into the US are feeder cattle that are shipped into feedyards in Texas, New Mexico and other nearby states. We currently estimate that total imports of Mexican Cattle in 2017 were 1.057 million head, with a value of $662.8 million. This represents a 12% increase in volume and 13% increase in value compared to 2016. In addition, the US imported an additional 602k head of cattle from Canada. Some US cattle also move north of the border but the US remains a large net importer of Canadian cattle. In 2017 our cattle trade balance with Canada was negative 441k head. Total net cattle trade balance with NAFTA countries was –1.457 million head or -$1.2 billion.

    In the past the US was a net exporter of beef into NAFTA but that has changed as well. We estimate that in 2017 the US ran a negative beef trade balance with these two countries. Net beef trade with Mexico was a negative 62,000 MT (-$191M) while net beef trade with Canada was negative 131.5k MT (-$400M). When you total both cattle and beef, the US ran a negative trade balance with NAFTA of around $1.8 billion. These numbers do not include variety meats, hides or any other such products.

    Secretary Purdue has cautioned President Trump about pulling out of NAFTA. The President has only promised to delay any action until after Mexico’s election this coming summer. In the meantime negotiations continue and some may impact the daily business decisions of many in the beef industry. Thinking through the ramifications of the various aspect of the beef trade between our neighbors can have unintended consequences.

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    Trump Willing to Extend NAFTA Talks Past Mexico Election
    Meatingplace.com 
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    In an interview with the Wall Street Journal, President Donald Trump said he’s still willing to terminate the North American Free Trade Agreement (NAFTA) but would prefer to renegotiate and is willing to wait until after Mexico’s upcoming election.

    “I’m leaving it a little flexible because they have an election coming up. ... [A]nd I understand that that makes it a little bit difficult for them ... . [T]here’s no rush, but I will say that if we don’t make a fair deal for this country, a Trump deal, ... I will terminate,” he said in a transcript of the interview published by the Wall Street Journal last Thursday. “With that being said, I would rather be able to negotiate. We’ve made a lot of headway. We’re moving along nicely. Bob Lighthizer and others are working very hard, and we’ll see what happens.”

    Mexico will hold its next general election on July 1. This would push talks beyond the previously set end-March deadline.

    Canadian Minister of Foreign Affairs Chrystia Freeland welcomed the news, speaking to reporters on Friday on the sidelines of a Cabinet retreat, Reuters reported.

    Prime Minister Justin Trudeau later told reporters that he was optimistic the three nations would be able to agree on improvements to NAFTA while reiterating Canada’s stance that “we will not accept just any deal.”

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

    Typical closeout for un-hedged steers sold this week:

    • Placed On Feed 165 days ago = August 7th
    • P/(L) based on the futures when placed on feed: $77.74
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    Cost of 750 lb. steer delivered @ $149.19 per cwt:       $1,118.93
    Feed Cost for 600 lbs. @ $72.65 per cwt:                        $435.90
    Interest @ Prime + 2% on cattle cost for 165 days:            $29.08
    Interest @ Prime + 2% of the feed cost for 165 days:          $5.67
    Total Cost & Expense:                                                $1,589.57
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    Sale proceeds: 1,350 lb. steer @ $122.00 per cwt:    $1,647.00
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    This week's Profit/(Loss) per head:                                $57.43
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    Profit/(Loss) per head for previous week:                           $18.80
    Change from previous week:                                            + $38.63
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    Sale price necessary to breakeven:                            $117.75
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    Projected closeout for steers placed on feed this week:
  • Projected Sale Date @ 165 days on feed = July 3rd
  • Cost of 750 lb. steer delivered @ $148.08 per cwt:       $1,110.60
    Feed Cost for 600 lbs. @ $74.82 per cwt:                        $448.92
    Interest @ Prime + 2% on cattle cost for 165 days:            $31.38
    Interest @ Prime + 2% of the feed cost for 165 days:          $6.34
    Total Cost & Expense:                                                $1,597.24
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    Sale proceeds: August Futures @ $112.02 per cwt:   $1,512.27
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    This week's Profit/(Loss) per head:                           ($84.97)
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    Profit/(Loss) per head for previous week:                        ($93.08)
    Change from previous week:                                              +$8.11
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    Sale price necessary to breakeven:                            $118.31

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    Typical closeout for hedged steers sold this week: $77.74
    Typical closeout for un-hedged steers sold this week: $57.43
    Projected closeout for steers placed on feed this week: ($84.97)
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    Slaughter Cattle:
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    Slaughter Cattle: Thus far Friday, trade was mostly inactive on light demand in all major feeding regions. Last week live cash purchases were at 120.00 in all major feedings regions. In Nebraska, dressed purchases were at 192.00. In the Western Cornbelt dressed purchases ranged from 190.00-192.00.

    Trade developed late Friday afternoon at $195 in the North and $122.00 to $123.00 in the South.

    Negotiated Sales: Confirmed: 620    Week Ago: 6,581    Year Ago: 8,427

    Formula Purchases: Net - Dressed
    Head count priced today: 13,300
    Weighted avg weight:       852.00
    Weighted avg net price:   191.13

    Livestock Slaughter under Federal Inspection:

                                         CATTLE      CALVES    HOGS         SHEEP
    Friday  (est            117,000     2,000      456,000      7,000
    Week ago (est)      116,000     2,000      454,000      7,000
    Year ago (act)       114,000     3,000      425,000      6,000
    Week to date (est) 588,000   10,000   2,175,000    40,000
    Week (est)             588,000   10,000   2,269,000    39,000
    Last Year (act)       525,000   11,000   2,057,000    36,000

    Saturday  (est          27,000        0          163,000     1,000
    Week ago (est)        23,000        0         181,000         0
    Year ago (act)          47,000        0         280,000         0
    Week to date (est) 615,000   10,000   2,338,000    41,000
    Last Week (est)     611,000   10,000   2,450,000    39,000
    Last Year* (act)     571,000   10,000   2,336,000    36,000
    2018 YTD           1,771,000   30,000   6,910,000   111,000
    2017 *YTD          1,724,000   31,000   6,804,000   108,000
    Percent change         2.7%      -4.4%        1.6%         2.6%

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    National Grain Summary:
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    Compared to last week, cash bids for wheat were lower, corn, soybeans and sorghum traded higher.  This week, corn prices hit a new five month high and soybeans reached their highest price this month.  Gains fueled by a higher soybean meal market as well as weather concerns for South America.  USDA's export sales and shipments report is delyaed this week due to the Monday holiday and is set to be released this morning. Wheat was mixed from 3/4 to 7 cents lower.  Corn was 1 3/4 to 7 3/4 cents higher. Sorghum was 5 to 6 cents higher.  Soybeans were 23 cents higher.

    Corn futures saw steady to 1 1/4 cent gains on Friday, as March was up 1.81% on the week. This morning, the USDA showed the old crop corn export sales blowing past expectations at 1.888 MMT (74.3 million bushels). That was 38.08% larger than the same week in 2017. Unknown destinations purchased nearly 770,200 MT, with Japan buying 415,600 MT. There were also 2,413 MT in new crop sales. Export shipments were a different story, as they fell 25.9% from the previous week at 659,710 MT, down 28.9% from a year ago. Most of those shipments were to Mexico (252,000 MT) and Japan (216,600 MT). Argentina’s early corn crop was rated at 12% gd/ex and 44.9% poor/very poor by the Buenos Aires Grain Exchange, compared to last year’s 33.4% gd/ex and 32.7% p/vp at this time.

    Wheat futures were down 1 to 3 cents in most contracts ahead of the weekend, on the heels of a slow Export Sales report. MPLS contracts are steady to 3 cents lower. The Export Sales report this morning showed all wheat sales of just 153,115 MT, the fourth smallest sale this marketing year. That was above last week’s MY low, but still lags this time in 2017 by 36.9%. Japan purchased a majority of that total at 97,200 MT. There were an additional 37,500 MTs in new crop sales, bringing the total 18/19 sales to 241,252 MT, 1.5% shy of this time last year. Wheat export shipments picked up to 422,383 MT, edging out this time last year by 6.99% and well above the previous week. The Commitment of Traders report on Friday afternoon showed spec funds reducing their net short position in KC wheat by 5,214 contracts for the week ending 1/16 to a net position of -12,386 contracts.

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    Five Year Moving Average - Corn & Wheat:
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    Your Suggestions:
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    Our goal is for the Weekly Market Summary to provide a 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.
     
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    Although all information is from sources believed to be accurate & timely, The Cattle Range expressly disclaims all warranties, expressed or implied, as to the accuracy of any of the contents provided and shall not be liable for decisions or actions taken based on the data/information/opinions contained within.
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