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Market Summary for the week ending September 23th:
September 23, 2016
  • Receive.the WMS Saturday mornings via e-mail or to have it sent to friends & associates
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The Cattle Range 10 Day Market Trendline:
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Bullish: "Modest gains" describes the overall Cattle/Beef market for the past 10 days but the Live & Feeder Cattle Futures erasing large losses in Friday's trading was impressive. This, together with robust marketing of fed cattle in August and supplies of red meat in cold storage being down 3% from a year ago, paints a more optimistic picture.
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Change from Previous Day: -0.80% -- 10 Day Change: +2.11%
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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         158,800     58,000          23,000          239,800 
Last Week         153,300     36,000          88,500          277,800 
Last Year           177,700     53,200          19,700          250,600 

Compared to last week, feeder steers and heifers sold mostly 3.00 to 5.00 higher, with instances 7.00 to 10.00 higher.  Calves trended steady to 4.00 higher this period.  Last week's higher fed cattle trade gave a boost to cattle country psychology as CME cattle futures also turned green on Wednesday giving support to the feeder cattle market.  With a little less volatility on the futures board, buyers were more focused on condition and willing to step up on thin to average flesh, long-time weaned calves.  Some of the highest cattle in the country sold on Wednesday at the St Joseph Stockyards with a string of steers weighing 773 lbs selling at 154.75. 

Seasonal fall runs have been slow to develop, causing some to question if the cattle are really out there in the country or if producers are just so depressed with current price levels they are trying to wait it out.  If the excellent condition of pastures and plenty of feed, has producers holding back from marketing, they risk more price decline, to a point that the additional pounds can’t catch up.  In the slaughter cattle complex, last week’s higher market was welcomed by feeders in all areas.   This upward move carried over to the cattle futures, with Wednesday’s close reaching a high for October at 108.50.  Mid-week on the Fed Cattle Exchange only 775 head of the nearly 2500 head offered settled at a price mostly steady to last week’s cash trade, supporting the thought that packer demand was light.  However, as of this writing trade had not developed, with traders bracing for the USDA’s Cattle on Feed and Cold Storage reports. 

Packers have been diligent to slow down the upward move this week, by taking out 2 percent of this week’s fed harvest number compared to last week.  This is normal during this time of year as packers perform annual plant cleaning and repairs.  A combination of formula, forward contracts and negotiated purchases all seem to add up to limited packer needs going into October. 

In the grain complex we seen corn 6 to 12 cents higher and soybeans 18 to 26 cents higher However, the highs were limited as early yields were better than expected.  Soybeans saw strength from on-going demand.  Wheat saw support from news of Egypt easing on zero percent ergot restriction.  The harvest is underway in parts of the Southern Plains and Midwest after being delayed last week due to heavy rain.  The crop condition ratings for corn and soybeans held steady at 74 percent and 73 percent good to excellent condition, respectively.  Spring Wheat harvest is all but done with 98 percent complete and 17 percent of winter wheat planted. 

It was also announced that China has agreed to open its borders to US beef after a 13 year ban.  This was a welcome development giving the importance China now has in the global beef trade.  It is not sure when product will start moving, as quarantine requirement still need to be developed and installed.  On positive note, as we move into October and November we normally see a seasonal rally in boxed beef values.   This week prices have stayed somewhat steady with slight upward move late in the period, after dipping weaker mid- week.  In fact, the chuck and round primal cuts have already posted good increases this week, which is very seasonal.  Beef 50s trim continues to languish near multiple year lows, sub-$40 after trading above $90 earlier this year.  Auction volume this week included 50 percent weighing over 600 lbs and 39 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: After opening sharply lower, live and feeder cattle futures posted an impressive comeback to end the day mixed. For the week, December live cattle posted a loss of $1.20 and October feeders ended the week with a loss of 57 1/2 cents. 5-day outlook: This afternoon's USDA data is neutral for the market to start next week, with On Feed coming in about as expected.
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Selected Auction Reports:
"Click" on individualauction links for complete report

Oklahoma National Stockyards - Oklahoma City OK
Receipts:  5,969    Week ago:  6,073    Year ago:  6,434
Compared to last week:  Feeder steers and heifers 2.00-5.00 higher.  Demand good for feeders, especially for heavier weights.  Steer calves steady to 5.00 higher.

Joplin Regional Stockyards - Carthage MO
Receipts:  3,707     Week ago:   5,737    Year ago:  3,756
Compared to last week, steers and heifers sold 1.00 to 3.00 higher, spots 5.00 to 7.00 higher on weaned cattle. Cattle futures traded modestly lower to start the week but the local cash feeder market wasn't hindered by it.

Farmers & Ranchers Livestock Commission Co. - Salina KS
Receipts:  2596    Last Week:  2063    Year Ago:  3016
Compared to last week: Feeder steers 700-950 lbs 4.00-7.00 higher; Feeder heifers firm to 5.00 higher on a light test of Medium and Large 1.

Tadlock Stockyards - Forest MS...
Receipts     This week    1,372     Last Week    1,080
Compared to last week slaughter cows trended 1.00 to 6.00 Lower. Slaughter bulls trended Steady. Feeder steers trended 4.00 to 7.00 Lower. Feeder heifers trended 5.00 to 8.00 Lower.

Athens Livestock Auction - Athens GA...
Receipts:  921    Last Week:  1094    Year Ago:  879
Compared to one week earlier, slaughter cows mostly steady, slaughter bulls steady to 3.00 lower, feeder steers unevenly steady, steer calves steady to 3.00 higher, feeder bulls 3.00 to 6.00 higher,

Cullman Stockyard - Cullman AL...
Receipts:  1363    Last Week:  1325    Year Ago:  1156
Compared to two weeks ago: Slaughter cows sold 3.00 to 5.00 lower, bulls sold 3.00 to 4.00 lower. Feeder bulls and steers sold 4.00 to 6.00 lower. Feeder heifers sold 4.00 to 6.00 lower.

Green Forest Livestock Auction - Green Forest AR...
Receipts:  1356          Last week:  486               Last year:  766
Compared to last week: Feeders steady to 8.00 higher mostly 2.00-6.00 higher with a light or no test in most weights over 600lbs last week. Today’s offering included several groups of weaned calves.

Cattleman's Livestock Auction - Dalhart, TX
Cattle and Calves: 1972      Week ago: 1648      Year Ago:  1072
Compared to last week:  Steer and heifer calves under 650 lbs generally steady to weak except a few packages of reputation calves 1.00-2.00 higher and several packages fleshy unweaned kinds 1.00-3.00 lower.

Tulia Livestock Auction - Tulia TX
Receipts:  2010    Last Week:  1091    Year Ago:  1057
Compared to last week:  Feeder steers and heifers sold steady to 2.00 higher.  Trade was active on good demand.  Supply included several loads of attractive quality yearlings weighing 700-800 lbs.

El Reno Cattle Narrative - El Reno OK
Receipts:  6,079     Week ago:   7,218    Year ago:  4,790
Compared to last week,  Feeder steers sold 4.00 to 7.00 higher and Feeder  heifers mostly 3.00-5.00 higher, several large load lots of attractive heifers  were on offer today.   Demand good for feeders, especially for heavier weights  with good weight-ups.

Clovis Livestock Auction - Clovis NM
Receipts:  2759             Week Ago: 1831              Year Ago: 2302
Compared to last week:  Feeder steers under 600 lbs 1.00-3.00 higher, over 600 lbs 5.00 higher.  Heifers under 500 lbs 1.00-5.00 lower; over 500 lbs 1.00-3.00 higher. Slaughter cows 3.00 lower.

Pratt Livestock Feeder Cattle Auction - Pratt, KS
Receipts:  1148    Last Week:  2753    Year Ago:  3449
Compared to last week: in a very limited supply feeder steers and heifers steady to firm. Steer and heifer calves a steady undertone noted. Slaughter cows and bulls weak to lower undertone noted in a limited supply.

Mitchell Livestock Wtd Avg Report - Mitchell SD
Receipts:  2064    Last Week:  1513    Year Ago:  1746
Compared to last week:  No comparisons able to be made as offerings were of different weights than seen last week.  Demand moderate to good for yearling cattle, moderate demand at best for calves.

Toppenish, WA Livestock Auction - Toppenish WA
Receipts:  1430    Last Week:  1500    Year Ago:  1900
Compared to last Thursday at the same market, stocker and feeder cattle firm to 8.00 higher. Trade active with good demand. Slaughter cows 5.00-6.00 lower with an interest or so out of the market.

Tri-State Livestock Auction Market - McCook NE
Receipts:  3600    Last Week:  2750    Year Ago:  0
Compared to last week steer calves were 2.00 – 4.00 higher and heifer calves were 2.00 – 4.00 lower. No comparison on cattle over 700 lbs. Good selection of calves offered.

Sioux Falls Regional Livestock - Worthing SD
Receipts:  1271    Last Week:  2653    Year Ago:  1507
Compared to last week:  Feeder steers and heifers steady to firm on much lighter offerings than last week.  Demand light to moderate for spring born calves with most with 2 rounds of shots and off the cow; moderate to good demand for yearlings.

Mid-South Livestock - Unionville TN...
Receipts: 825       Last week: 1172        Last year: 1046
Compared to last week, Feeder Steers/Bulls steady to 5.00 higher; Feeder Heifers steady to 5.00 higher; Slaughter Cows steady to 4.00 Lower; Slaughter Bulls steady to 4.00 lower.

Florence Livestock Auction - Florence AL...
Receipts:  839    Last Week:  1079    Year Ago:  965
Compared to a week ago: Slaughter cows sold 10.00 lower, bulls sold sharply lower. All feeder classes sold 1.00 to 5.00 lower. Demand on feeders light.

Blue Grass South Livestock Market - Stanford KY...
Receipts:  1081    Last Week:  579    Year Ago:  807
Compared to last Monday:Feeder steers under 700 lbs steady to 2.00 lower,over 700 lbs 1.00-2.00 higher,Feeder heifers mostly steady,Moderate demand for unweaned fleshy calves,

Direct Sales of Feeder & Stocker Cattle:

WY, Western NE & Western Dakotas Direct Feeder Cattle Wtd Avg (Fri)
Receipts: 2699    Week Ago:  2457    Year Ago:  2585 
Compared to last week, yearling steers and heifers sold unevenly steady. No reported calf price last week for a market comparison.  Calves will come right off mommas’ side at time of delivery and most will have pre-condition shots. 

AZ-CA-NV Weekly Feeder Cattle Review (Fri)
Confirmed: 900 
Compared to last week, Holstein calf trade slow, demand light.  A few loads of Holstein steer calves weighing 300 lbs for February delivey traded this week.

Colorado Direct Feeder Cattle Report (Fri)
Receipts: 9,038        Last Week 2,906        Last Year 3,173 
Compared to last week:  Feeder steers and heifers not well tested for current FOB delivery but a higher undertone is noted.  Demand  moderate to good. 

IA-South MN Direct Feeder Cattle Weekly (Mon)
Receipts:  0     Last Week:  542     Last Year:  287
Compared to last week:  Feeder steers and heifers not established.  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.

Kansas Direct Feeder Cattle Summary (Fri)
Receipts:  3815    Last Week:  3627    Year Ago:  6947
Compared with last week: Feeder steers firm to 5.00 higher; Feeder heifers frim to 2.00 higher on current FOB sales. Demand remains good or feeders. Sales confirmed on 2676 steers, 1139 heifers and no calves for a  total of 3815 compared with 3627 last week and 6847 last ear.

Montana Direct Feeder Cattle Wtd Avg (Fri)
Receipts: 360          Last Week              Last Year 170 
Compared to last week: Feeder steers and heifers not established due to no Current FOB trades.  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:  4300    Last Week:  1300    Year Ago:  2000
Compared to last week:  Feeder steers and heifers sold steady to instances 5.00 higher.  Trade activity and demand were moderate.  Supply consisted of 65 percent steers and 35 percent heifers.

Northwest Wtd Avg Direct Feeder Cattle Report (Fri)
Receipts:  4350    Last Week:  1300    Year Ago:  3100
Compared to last Friday, feeder cattle steady to 2.00 higher in a light test as slaughter cattle prices last week traded higher. Trade slow to moderate with light to moderate demand. The feeder supply included 64 percent steers and 36 percent heifers.

Oklahoma Direct Feeder Cattle (Fri)
Receipts: 6,230        Last Week 3,505        Last Year 4,307 
Compared to last week:  Feeder steers and heifers sold mostly 2.00-5.00 higher.  Demand moderate to good.  Receipts this week consisted of 100 percent over 600 lbs and 15 percent heifers. 

Texas Direct Feeder Cattle (Fri)
Confirmed: 26,000     Last Week: 20,400    Last Year: 29,200
Compared to last week current FOB feeder steers and heifers, firm to 8.00 higher but mostly 2.00-6.00 higher following the price rally that started last week. Approximately 97 percent of week's cattle weighed over 600 lbs. 
 

  • 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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    • Video Auction: 
      • Medium and large 1900-1100 lbs calving Feb to April, Delivery 09/26-11/18 1,285.00-1,425.00 per head, Fancy Red Angus pkg 1,700.00.  Medium 1 900 lbs Delivery 11/14-11/18 1,210.00-1285.00. 3 year olds 348 hd.  Medium and large 1 1100-1150 lbs calving 2/01-5/15, Delivery 11/01-12/10 1,485.00-1,600.00 per head.  6 year olds: 120 hd. Medium and large 1 1250 lbs calving 3/15-4/30, Delivery 10/20-11/10 1,400.00 per head.  Middle age-Aged cows (un-mouthed) 330 hd.  Medium and large 1 1100-1300 lbs calving 3/01-5/01, Delivery 10/18-12/01 810.00-950.00.
    • Bowling Green, MO:
      • Bred Heifers:  Medium and Large 1-2  41 head string 825-875 lbs black AI bred 1st stage 1400.00-1425.00, few 750-800 lbs 1125.00-1350.00; 3-6 yrs 1100-1500 lbs 3rd stage 1410.00-1620.00, few 2nd stage 1320.00-1400.00 per head. 
      • Pairs:  Medium and Large 1-2  2-6 yrs 1150-1350 lbs w/baby calves to 250 lb calves 1600.00-1960.00 per pair.
    • Springfield, MO: 
      • Bred Cows:  Medium and Large 1 Few 2-7 yrs 2nd and 3rd stage 1100-1375 lbs 1310.00-1565.00. Medium and Large 1-2 Few 6 yrs to broken mouth 2nd to 3rd stage 1150-1425 lbs 800.00-1075.00; Few 2-7 yrs 1st stage 975-1100 lbs 825.00-1150.00 per head. 
      • Cow/Calf Pairs:  Medium and Large 1-2 Few 2 yrs to short and solid 900-1325 lbs with 200 to 400 lb calves 1225.00-1475.00; Few short and solid to broken mouth 900-1400 lbs with baby to 300 lb calves 1075.00- 1200.00 per pair.
    • West Plains, MO:
      • Bred Cows:  Medium and Large 1-2  2-7 yr old 910-1505 lb cows in the 2nd-3rd stage 1100.00-1375.00 per head; Short-solid to broken mouth 1300-1715 lb cows in the 2nd-3rd stage 1000.00-1225.00 per head.  Medium and Large 2  2-7 yr old 882-1370 lb cows in the 1st-2nd stage 850.00-1050.00 per head. Short-solid to broken mouth 980-1310 lb cows in the 1st-3rd stage 650.00-1000.00 per head.  Medium 2  1-6 yr old 720-1080 lb cows in the 1st-3rd stage 700.00-900.00 per head.
      • Cow-Calf Pairs:  Few Medium and Large 1-2  2-6 yr old 860-1325 lb cows with 100-300 lb calves 1300.00-1500.00 per pair.
    • Joplin, MO:
      • Bred Cows:  Medium and Large 1-2  3-6 yrs 2nd and 3rd stage 1000-1345 lbs 1250.00-1500.00; 7 yrs to short and solid mouth 3rd stage pkg. 1090 lbs 1175.00; short and solid mouth to aged 2nd and 3rd stage 1125-1365 lbs 850.00-1075.00.  Medium and Large 2  4-6 yrs 2nd and 3rd stage 1100-1180 lbs 1000.00-1100.00, 1st stage 1195 lb indiv. 875.00. Medium 1-2  3-5 yrs 2nd and 3rd stage 950-1050 lbs 825.00-1100.00 per head.
      • Cow/Calf Pairs:  Medium and Large 1-2  3-6 yrs 960-1280 lb cows w/babies to 385 lb calves and several rebred 1500.00-1750.00, 6 yr 1365 lb cow w/newborn calf 1210.00. Medium and Large 2  7 yrs pkg. 1070 lb cows w/130 lb calves 1100.00. Medium 1-2  2-5 yrs 870-1025 lb cows w/160-360 lb calves and some rebred 1150.00-1400.00; broken mouth 1050 lb cow w/160 lb calf 1050.00 per pair.
    • Arkansas:
      • Replacement Cows:  Medium and Large 1-2  2-7 year old 850-1250 lbs second & third stage bred 93.00-103.00, 1100.00-1200.00/head; first stage/open 75.00-85.00; 7-10 year old second & third stage bred 74.00-84.00 850.00-950.00/head. 
      • Cow-Calf Pairs:  Medium and Large 1-2  3-7 year old 800-1200 lb cows w/100-200 lb calf 1400.00-1500.00/pair, few to 1850.00/pair, w/200-300 lb calf 1450.00-1550.00/pair, 7-10 year old w/100-200 lb calf 1100.00-1200.00/pair.
    • El Reno, OK:
      • Replacement Cows:  Medium and Large 1-2  1-8 yr old 1250-1425 lbs 3-5 months bred 800.00-1075.00; 4-6 yr old 1250-1425 lbs 5 months bred 1125.00-1525.00. 
      • Pairs:  Medium and Large 1-2 pkg 4 yr old 1500 lb cow w/150 lb calf 1300.00; pkg 8 yr old 1400 lb cow w/200 lb calf 1150.00.
    • Oklahoma City, OK: 
      • Replacement Cows:  Medium and Large 1-2  2-3 yr old 825-900 lbs 3  months bred 750.00; 3-6 yr old 1200-1550 lbs 3-7 months bred 1025.00-1175.00; 5-10 yr old 950-1425 lbs 2-7 months bred 725.00-935.00 per head. 
    • Woodward, OK: 
      • Replacement Cows:  Medium and Large 1-2  2-4 yr old 900-1050 lbs 2-6 months bred 1075.00-1235.00; 7-10 yr old 1125-1325 lbs 3-6 months bred 810.00-900.00; 8-10+ yr old 1125-1400 lbs 3-6 months bred 850.00-935.00 per head.
      • Pairs:  Medium and Large 1-2 pkg 7-9 yr old 1200 lb cow/w175-250 calf 1300.00; pkg 8-9 yr old 1350 lb cow w/450 lb calf 1550.00 Bred Back per pair.
    • McAlester, OK:
      • Replacement Cows:  Medium and Large 1-2  1-6 yr old 975-1125 lbs 6-8 months bred 1010.00-1225.00; 1-6 yr old 900-1325 lbs 4-6 months bred 960.00-1300.00; 7-10 yr old 1050-1500 lbs 4-8 months bred 950.00-1125.00. 
      • Pairs:  Medium and Large 1-2  5-8 yr old 1100-1350 lb cows w/100-115 lb calf 1150.00-1225.00; pkg 9-10 yr old 1075 lb cow w/200 lb calf 935.00.
    • Roswell, NM:
      • Replacement Cows: Medium and Large 1-2 Young 760-1380 lb cows 1-8 months bred 900.00-1500.00, per head; middle aged 1090-1245 lb cows 3-6 months bred 900.00-1100.00, per head.  First Calf Heifers: Pkg 1029 lb cows 3-6 months bred 1375.00, per head. 
      • Cow/Calf Pairs:  Medium and Large 1-2 Indiv 1140 lb cow w/225 lb calf 1550.00, per pair.
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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 the bulk of dressed sales being marked at 225.00 delivered which is 5.00-10.00 higher than the previous week. Cash to futures basis levels strengthened compared to last week and still remain stronger than the five-year historical average.
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    Canadian Cattle Prices:
    Prices have been converted to U.S. $/CWT.  Grades changed to approximate U.S. equivalents
    Exchange Rate: Canadian dollar equivalent to $0.7581 U.S. dollars
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    Prices for the week ending September 16th:
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    Canadian Feedlot to Cease Operations
    Reuters
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    One of Canada’s biggest cattle feedlots, Alberta-based Western Feedlots, said on Wednesday it will suspend feeding operations after marketing the cattle it currently owns, due to poor economic conditions.

    The company, started in 1958, will continue its farming operations, it said in a release.

    Shareholders made the decision because of the high-risk, low-return environment in cattle ownership, and poor political and economic conditions in Alberta, Western said. It did not elaborate on the conditions in Alberta, which last year elected its first left-leaning government in decades.

    Canada is the world’s sixth-largest beef exporter, and Alberta raises more cattle than any other province.

    Loss of the feedlot “takes out a material portion of demand for cattle across the Prairies,” said livestock industry analyst Kevin Grier. “To me, this is pretty big news.”

    Grier said losing feedlot capacity is not surprising, given short Canadian supply and the high price of young cattle that feedlots buy and raise to slaughter weight, as well as the weak price of fed cattle.

    Recent Alberta fed cattle prices of $125 per hundredweight (100 pounds) are down 30 per cent from a year ago, he said.

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    Tire-Changing Ramp for Trailers
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    September 23rd Cattle on Feed Report:
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    United States Cattle on Feed Up 1.63 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 10.1 million head on September 1, 2016. The inventory was 1.63 percent above September 1, 2015.
    • Placements in feedlots during August totaled 1.88 million head, 15.13 percent above 2015. Net placements were 1.84 million head. During August, placements of cattle and calves weighing less than 600 pounds were 360,000 head, 600-699 pounds were 290,000 head, 700-799 pounds were 429,000 head, and 800 pounds and greater were 800,000 head.
    • Marketings of fed cattle during August totaled 1.87 million head, 17.63 percent above 2015.
    • Other disappearance totaled 41,000 head during August, 31.67 percent below 2015
    "Click" to view 5 Year Charts
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    September 23rd USDA Cold Storage Report
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    • Total red meat supplies in freezers were up 1 percent from the previous month but down 3 percent from last year. 
      • Total pounds of beef in freezers were up 1 percent from the previous month and up 1 percent from last year. 
      • Frozen pork supplies were up 1 percent from the previous month but down 7 percent from last year. 
      • Stocks of pork bellies were down 37 percent from last month but up 132 percent from last year.
    • Total frozen poultry supplies on August 31, 2016 were down 4 percent from the previous month but up 4 percent from a year ago. 
      • Total stocks of chicken were down 6 percent from the previous month and down 1 percent from last year. 
      • Total pounds of turkey in freezers were up slightly from last month and up 11 percent from August 31, 2015.
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    Boxed Beef & Retail Beef Prices Lower
    Stephen R. Koontz, Colorado State University
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    There are a couple of things that have happened in cattle and beef markets across the last two weeks that need to have attention called to.  First, the boxed beef cutout value moved well below $2 per pound last week. It has been sometime since this price level has occurred.  Occasionally this fall the beef products that make up the composite have traded at levels where the combined level has dipped below $2 per pound. But last week the value was approximately $1.85 with October yet to come.  Second, during the week of September 6 the live cattle futures prices for October and December contracts traded for several days below $1 per pound and November feeder cattle contract traded below $1.25.  It is safe to say that it will likely be some time before the market prices for cattle and beef return to the levels seen from 2012-2014.  The shocks to the commodity system that occurred in 2007 and then again from 2009-2013 appear to have played out. This is good news for consumers, food service providers and restaurant establishments.  These levels also require cattle producers reevaluate long-term plans.

    In that last context, what next? Where’s the good news for producers? I believe we are in that phase of price adjustments where things look the worst and the potential for market change is most likely. Saturday beef slaughter numbers continue to be the highest in recent years. The Saturday volumes have been strong. Beef production is up but the lower prices are clearly encouraging product movement. Hamburger products and end meat cuts are showing the most price weakness. But the middle meats are not immune – loin cuts have moved progressively lower through the summer. Domestic demand has showed some weakness but the evidence is not substantial. Lower prices are resulting moving volumes and clearly the heavy showlists that has persisted since last year.  Further, the lower prices are translating into reasonably good beef export figures. July’s numbers were solid without much help from a cheaper dollar. Retail beef price showed is largest decrease in years with last month’s reported price and this is a price level that includes none of the discounts from retail featuring.  Retailers – and packers – are and will likely command very solid beef margins, possibly, well into next year.

    Finally, fed heifer slaughter is sharply higher through the summer. The majority of increased beef production is from fed heifers. The weekly figures for August and September 2016 are 20-30 thousand head per week higher than 2015. Expansion has likely not stopped but will prove to be lower than initial forecasts and appears unlikely to continue substantially into 2017. I don’t foresee fall of 2017 being more of 2016. And that is a long way off with the markets we’ve had to discuss the last two years.

    What do the technical say? Mainly, it’s, “My, that’s a big corn crop.” The discussion last week in this column of feedlot profitability was timely and useful.  DEC16 corn has rallied off support but the down trend in holding. I expect more down moves.  And it appears cash basis agrees – very weak basis is shaping up for corn before much is harvested.  The technicals for live and feeder cattle are exactly the same as corn. Support plains established in August where soundly broken in September.  The markets have rallied since these down moves and established new support. But down trends remain in place and more down moves are likely to continue.  I will be watching the Cattle on Feed report Friday and will be most interested in the calculated market ready inventories. Do the showlist inventories continue to tighten with strong slaughter volumes?  Or do the potential for heavier volumes hang over the market?

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    USDA National Retail Beef Report - September 16th thru 22nd
    Advertised Prices for Beef at Major Retail Supermarket Outlets
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    This week in the Beef Retail Report shows Feature Rate lower by 5.3%, Special Rate lower by 7.4%
    and an increase in Activity Index of 1,230 when compared to the prior week. A few more retailers
    advertised Porterhouse Steak, Bone-In Strip Steak, Eye of Round Steak and Skirt Steak this when
    compared to the prior week. Within the 4 Week Comparison Rib and Round cuts showed more activity
    than the prior two weeks.
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    Photo of the Week:
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  • Red Angus Cross Bred Heifers... Southwest VA*
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    Shootin' the Bull Weekly Analysis
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    In my opinion, this has been one whale of a week in cattle.  October fats are perceived to have created a 5 wave move from the $99.37 low to the $108.10 high.  The price action from the $108.10 high to the $109.22 high is perceived to be an irregular B wave of an A,B,C correction.  The price action from the $109.22 high to Friday's low of $104.42 is the C wave of this correction.  What is unknown is whether the initial move up is an A wave or a wave 1.  Regardless,  Friday's low is anticipated to be a wave 2 or B with a wave C or 3 anticipated to push October fats higher.  The upside target for the wave C is $115.17 and a wave 3 to $121.20. The abruptness of the sell off Thursday and Friday had my phone ringing off the hook. 

    Here is what I perceive has transpired.   Packers were perceived long the futures from when October was at or below $100.00.  At that time, that was $5.00 to $6.00 under the lowest established cash trade.  In the two weeks following, futures moved higher and helped to reverse cash.  With packers perceived owning inventory through futures contracts, the rally produced profits over and above still having to pay $110.00 cash last week.  This week, the futures continued higher, closing the basis and the spreads between months narrowed that produced no advantage to the packer.  On Thursday as their needs grew, it is anticipated that the packers had no advantage in buying cattle, so they potentially made one.  It is possible that packers have sold their futures, creating a panic to bearish weary producers.  The futures drop and with in less than 24 hours, packers are able to buy cattle at the desired $105.00 level in the futures.  Now, regardless of what happens, the packers own cattle at the lower end of the price range, and can be delivered as soon as next week as October expires.  Even if by days end they have to pay steady money or higher, the futures would then be anticipated to move higher, closing the basis with futures moving up. 

    Now, nothing I've stated is fact.  That is because no packer is going to tell anyone of their strategy.  However, there are only two players and they only trade once a week with one another, so it is not too awfully difficult to at least visualize what I perceive to have transpired.  Recall what was stated earlier this week, the packer needed an antic of some kind to turn the tide.  From "The Beef", Ms. Fish had made mention of the packers vocalizing a smaller kill week and potential cooler cleaning day.  Everyone knows the distress the producer is in and how easy it is at this time to push the hot buttons.  The phone traffic this morning alone was phenomenal, suggesting it didn't take much to bring concern right back to the forefront.  Lastly, the development of the chart pattern that resembles a "falling off the cliff" look, leads me to anticipate the next few days spent attempting to climb back up it.  This pattern is of my own recognition.  Take this analysis with two grains of salt as I fully understand the detriment that will ensue if incorrect on my analysis.  Supply is the bears drum beat.  Keeping current is anticipated to soften the noise.  Due to dealing in the future, it will be this time next week to see how accurate my analysis is.  Lastly, I continue to anticipate the trek to $116.00 October still intact. 

    Feeder cattle remain stuck in rut.  They didn't even come close to putting on as much price as did the fats.  Hence, when fats broke on Friday, the feeders tested the current contract lows on the front months and made new contract lows in the back.  Moving forward there remains not much to drive the feeder market.  However, there isn't much to drive it much lower either.  With the discounts of the back months, there appears even less reason to want to hedge feeders.  From here, a resumption of higher trading in fats would be friendly towards the feeders, but anticipated to only be keeping them buoyed at this time.

    Corn went from wallowing to meandering.  There is not much transpiring in the corn to make recommendation for.  This week, I had made the recommendation to buy July '17 bean meal. Meal didn't perform very stellar this week, but didn't break near as hard as did the beans themselves.  I don't see much to do at this time with any of the grains. 

    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.

    ,

    .
    Brazil's Impact as a Beef Exporter to U.S.
    CME Group
    .
    Media has reported that several beef producing facilities in Brazil have been approved to export fresh beef to the U.S. While we have heard this report from several sources, we have yet to be able to confirm it with USDA’s Food Safety Inspection Service.

    According to reports, three main international beef producing companies who have plants in Brazil; JBS, Marfrig, and Minerva, have all had individual Brazil units (plants) approved for export to the U.S. JBS has 4 units approved, andreported the first batch of fresh beef will be shipped to the U.S. this weekend. Marfrig has 6 units approved for export and said it has already shipped its first container of fresh beef to the U.S., and Minerva had 2 units approved for exporting.

    To recap, on August 1st, the USDA announced the reopening of fresh beef trade with Brazil. At the time of announcement no specific plant in Brazil had approval, but the announcement jumpstarted the plant specific approval process. While this market is now open and operating, we do not expect a major influx of Brazilian beef into the U.S. in the short run, mainly due to Tariff Rate Quotas (TRQ’s) and Brazil’s foothold in other major markets. To review, TRQ’s are assigned to countries exporting product to the U.S., who do not have a free trade agreement with us. The total TRQ for beef from countries without a free trade agreement or specific quota with the U.S. (defined as “Other Countries”) is 64,805 metric tons, and is used on a first come first served basis. Brazil falls into this “Other” category. Once the quota is reached, any beef exported to the U.S. from “Other” countries, over the maximum amount, is subject to a 26.4% ad valorem tax.

    Last year, 68% of the 64,805 mt (142 million pounds product weight) quota was filled, primarily by Nicaragua, Honduras, Costa Rica, and Ireland. This TRQ, along with the market share Brazil holds in Chinese and Russian beef imports, leads us to believe that relatively small levels of beef will be imported from Brazil at least for the first couple years. According to USDA’s Global Agricultural Information Network (GAIN), the recent report on Brazil’s 2016 Annual Livestock situation compiled by USDA staff in country, notes they expect Brazil to fill about 80% of the 64,805 mt quota in 2017. Note, the graph below shows that even if Brazil filled 80% of the quota, it would pale in comparison to the volume of beef we import from our main international sources.

    Brazil hosts an impressive cattle and beef industry. According to the GAIN report, Brazilian total beef cow inventory numbers were at 54 million head in 2015 and 55 million head in 2016. That is compared to the U.S. beef cow herd at 29 million head in 2015 and 30 million head in 2016. In Brazil, beef production, on a carcass weight equivalent (cwe), totaled 9,425,000 mt (20.8 billion pounds) in 2015 and is forecast at 9,620,000 mt cwe (21.2 billion pounds) in 2016, Almost 20% of their production goes to the export markets. This is compared to U.S. beef production which totaled 23.7 billion pounds cwe in 2015 and is estimated at 24.8 billion pounds in 2017. Brazilian cattle are generally smaller framed than in the U.S. Additionally, cattle in Brazil are largely finished on grass based pasture systems.

    The report describes the expected increase in Brazilian beef production into 2017 is underpinned by higher exports, mostly to Asian markets, along with a small increased in domestic demand due to a recovering economy. However, the report cautions that cattle producers and packers remain concerned with the price uncertainty of feed costs, along with the volatility of the exchange rate, as main factors that could affect margins. 

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    .
    Choice Boxed Beef Cutout, Slaughter, & Feeder Steers
    .

    The average value of hide and offal for the five days ending Fri, Sep 23, 2016   was estimated at 11.47 per cwt., up 0.20 from last week and down 1.00 from last year.
    ,

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    China to Resume U.S. Beef Imports
    .
    China's premier promised to resume Chinese imports of U.S. beef soon, calling it a sign of Beijing's sincerity to improve commercial ties with the U.S. Speaking to U.S. business groups in New York on Tuesday night, Premier Li Keqiang said China would soon allow imports of U.S. beef. 

    "We also recognize that the United States has very good beef, so why should we deny Chinese customers this choice?" Li said.

    Though the premier didn't give a specific timetable, trade groups have previously said imports may resume before the end of the year. 

    China has had a ban in place on most U.S. beef imports since 2003 when mad-cow disease was found in some American beef cattle.

    ..

    .
    Welcome to the ‘Meat Casino’
    Wall Street Journal
    .
    The Cattle Futures Market Descends Into Chaos.  Trading of physical cattle has become so scant that the futures market can’t get the signals it needs to set prices

    Wild swings in the cattle futures market have prompted some traders to call it “the meat casino.”

    In response, the world’s largest futures exchange has refused to list new contracts, leaving ranchers with fewer tools to hedge the $10.9 billion market. CME Group Inc. said that is because trading of physical cattle has become so scant that the futures market can’t get the signals it needs to set prices..

    “It’s madness. The market makes major moves for no reason,” said Blake Albers, a cattle feeder in Wisner, Neb.

    The decision to delay new contract listings is the culmination of alarms raised by the exchange and industry groups this year that problems in the physical marketplace have affected futures -- a highly unusual meltdown in a market that has attracted more speculators. About delaying listing subsequent contract months after the October 2017 contract month

    Few producers complained as cattle prices surged to record highs in 2014 and early 2015. But as prices this summer sank to five-year lows, financial strain on the industry has highlighted the extent of the problem. Revenue from cattle sales is forecast to drop 3.9% this year to $73.6 billion, after falling 5.7% in 2015, according to U.S. Department of Agriculture data.

    Live-cattle futures climbed as high as $1.4155 a pound before free-falling to $1.1580 over seven weeks this spring. That represents a more than $10,000 drop in income for a single contract. Many producers have lost money as prices tumbled to a five-year low of $1.07525 a pound this summer.

    “Guys like me who have been around a long time aren’t putting as many positions on,” said Dan Norcini, an independent livestock-futures trader in Coeur d’Alene, Idaho. “It’s just not worth the risk anymore, when there’s no rhyme or reason to these price swings.”

    ..

    .
    Why Grass-Fed Beef Is on a Roll
    Wall Street Journal
    .
    In ballpark burgers and on Wal-Mart shelves, people splurge on the leaner meat

    When many people eat beef, they want to know if the cow ate grass.

    Grass-fed beef, once a niche luxury, is now sold at ballgames, convention centers and nearly every Wal-Mart in the U.S.

    Beef labeled as grass-fed connotes much more than cattle that were raised in a pasture, say grocers and restaurateurs. Many consumers perceive grass-fed beef as a healthier, higher-quality alternative to conventional beef and are willing to pay more for it, no matter that labeling—and flavor—can be inconsistent.

    Grass-fed beef refers to cattle raised in a pasture, eating grass or “forage” like hay, according to the U.S. Department of Agriculture. Conventional methods of raising cattle involve feeding them grains like corn and soy to build fat. Use of antibiotics, growth hormones, pesticides and confinement can vary farm by farm however, as can flavor and tenderness.

    “When consumers see ‘grass-fed’ on the menu, they know we’re going out of our way on quality ingredients,” says Carl Mittleman, president of sports and entertainment at Aramark, a food-service company. In the last five years Aramark started serving grass-fed beef in venues including Fenway Park in Boston and Anaheim Convention Center in Anaheim, Calif. “Folks are willing to pay a premium price for better quality,” he says.

    Sales of grass-fed beef comprised just 1.4% of the $18 billion fresh-beef market in the U.S. in 2015, but its growth rate has far outpaced conventional beef in recent years, according to market-research firm Nielsen. Last year, sales of grass-fed beef rose nearly 40% over the year before, while conventional beef grew 6.5% during the same period.

    People often have to pay 30% to 80% more for a pound of grass-fed beef than for conventional beef. But lately beef prices have moderated, and availability of grass-fed beef has improved as more producers enter the premium market.

    Anna Tang says she splurges on ground grass-fed beef when she spots it on a menu or makes spaghetti sauce at home. “I don’t mind paying a little bit extra because it means more for my health,” says Ms. Tang, who works in admissions for a university in Pittsburgh. Grass-fed beef is leaner beef and is usually antibiotic-free.

    Wal-Mart Stores Inc. sells 1-pound packs of ground beef labeled ‘organic’ and ‘grass-fed’ for $5.98 in nearly all its 4,600 U.S. stores after starting to sell them in a handful of locations two years ago, says company spokesman John Forrest Ales. Wal-Mart sells other grass-fed cuts, but stocks the most stores with ground beef because it is inexpensive and is most likely to be part of mainstream diets, Mr. Ales says.

    Not all grass-fed beef is organic, but the move is part of Wal-Mart’s broader effort to sell more organic and premium products to draw desirable higher-income and young shoppers. Beef starred in a Wal-Mart online video ad earlier this year that showed seared hamburgers on a grill with the tagline “Someone is now carrying organic ground beef. Any guesses who?”

    “This isn’t a big market for it, but I think we have to try,” said Missy Craig, vice president of the Great Lakes region for Sam’s Club, the warehouse chain owned by Wal-Mart. A Sam’s Club in Jackson, Mich., this summer started carrying a small display of organic grass-fed ground beef, which Ms. Craig saysreminds shoppers they can come to the chain and find unexpected items. Sam’s Club started selling grass-fed beef in 200 stores last spring and by the end of the year will sell it in about two-thirds of its 654 stores, says a company spokesman.

    Not every retailer is onboard. Costco Wholesale Corp., the country’s second largest retailer after Wal-Mart, doesn’t sell grass-fed beef, though it sells organic ground beef in every U.S. store. The definition of grass-fed beef is still too ambiguous, the taste too inconsistent and Costco consumers gravitate most to an ‘organic’ label for now, says Jeff Lyons, Costco’s senior vice president of fresh foods.

    The U.S. Department of Agriculture’s Food Safety and Inspection Service reviews all label claims on meat and poultry, including grass-fed. It reviews documents, rather than sending inspectors to a ranch or farm as they do with USDA certified organic products, says a USDA spokesman.

    Some grass-fed beef producers say that the USDA’s guidelines don’t go far enough. “When consumers see grass-fed on a label, they have this vision in mind that the meat came from not-too-far away, from animals out on a pasture and not given antibiotics and hormones and in many cases, that’s not the truth,” says Marilyn Noble, a spokeswoman for the American Grassfed Association. The trade group has its own certification program that defines grass-fed animals as those that eat nothing but grass and forage without confinement, antibiotics or growth hormones, and are born and raised only in the U.S.

    Flimsy guidelines can also mean consumers risk buying lousy-tasting grass-fed beef, says Stefan Oellinger, head meat and poultry merchant at Fresh Direct, based in Long Island City, N.Y. The online grocer has worked with its grass-fed beef suppliers to develop a consistent level of flavor, tenderness and fat level.

    Fresh Direct’s grass-fed beef customers rose 74% since 2013, and now nearly one-third of all of its beef customers purchase grass-fed beef, the company says.

    Michael Anthony, executive chef at Gramercy Tavern restaurant in New York, visits the farms that supply his beef to ensure he understands their methods. “I’ve taken a pretty hard stance at the restaurant that if I can’t find a source of beef that I consider trustworthy, and know the producer on a first-name basis, then I won’t serve it,” he says.

    Mr. Anthony prefers grass-fed, grain-finished beef for his restaurant, including the 30 burgers Gramercy Tavern makes each day for diners who know to ask for the off-menu item. He likes grain-finished, which means cattle are fed grain in their final stage of life, because the process adds a more flavorful fat to the otherwise lean grass-fed beef, he says.

    Peter Vauthy, executive chef of Red, the Steak House in Miami Beach, Fla., avoids serving grass-fed beef altogether, disliking its texture, flavor and lack of marbling when compared with the grain-fed beef he prefers to serve. “It’s over-chewy and not as tender as my guests want it to be,” says Mr. Vauthy.

    Grass-fed beef costs more in part because the cattle take longer to reach slaughter weight than conventionally raised beef, says Dana Ehrlich, chief executive of Verde Farms, a Woburn, Mass.-based company that imports grass-fed beef from Uruguay, Australia and New Zealand, among other countries. The privately held company said it sold 10.1 million pounds of grass-fed beef last year, up from 240,000 pounds in 2008. Sales reached $50 million last year, up from $665,000 in 2008.

    ..

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

    Over the years, the value of 25 bushels of corn has been approximately equal to the price per cwt. for feeder steers.

    .
    5 Year Moving Average
    .
    ,

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

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

    .
    5 Year Moving Average
    .
    ,

    ..
    Slaughter Cows & Bulls
    .
    Slaughter cows and bulls sold 2.00-5.00 lower.  Slaughter bulls 1.00-5.00 lower. 

    Cutter Cow Carcass Cut-Out Value Friday at the close on Friday was 162.58 -- Down 4.04 from last Friday.

                      %Lean    Weight         Montana        Oklahoma        Alabama 
    Breakers  75-80%  1100-1600      -----              66.00-69.00    57.00-62.00
    Boners     80-85%  1000-1450   59.50-63.50   66.00-70.00    59.00-64.00
    Lean         85-90%  1000-1300   57.00-61.00   65.00-70.00    56.00-59.00
    Bulls         88-92%  1300-2500   79.75-84.50   90.00-94.50    89.00-94.00
     

                         Confirmed   Week Ago   Year Ago    WTD     Week Ago    Year Ago
    National           8,212         8,422           8,024       41,963     41,448         40,769
    S Central         2,080         1,830           1,707       11,095     10,383         10,911
    N Central            914         1,025              667          3,242       4,022           3,295
    East                 1,677         2,593           2,666        11,619    11,343         10,889
    West                2,091         1,179           1,439          7,845      7,517            8,348
    Midwest          1,450          1,795          1,545           8,162      8,183           7,326

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    .
    Est. Weekly Meat Production Under Federal Inspection
    .
    Total red meat production under Federal inspection for the week ending Saturday, September 24, 2016 was estimated at 1008.3 million lbs. according to the U.S.Department of Agriculture's Marketing Service. This was 1.7 percent higher than a week ago and 4.0 percent higher than a year ago.  Cumulative meat production for the year to date was 2.3 percent higher compared to the previous year.
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    Weekly Hay Reports: "Click" on links for detailed report
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    ,

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    Weekly Feedstuffs Market Review
    ,
    The USDA Market News Service reports feed ingredient prices for the week ending September 20 were mixed. 
    • Soybean Meal was 3.80 to 20.80 higher, mostly 3.80 to 13.80 higher. Cottonseed Meal was mixed 5.00 lower to 5.00 higher, mostly steady to 5.00 higher. Canola Meal was steady to 5.80 higher. Linseed Meal was steady to 15.00 lower. Sunflower Meal was steady to 30.00 higher. 
    • Whole Cottonseed was steady to 2.00 higher.
    • Crude Soybean Oil was 148 to 223 points higher. Crude Corn Oil was 20 to 100 points lower.
    • Ruminant Meat and Bone Meal was steady to 30.00 lower. Ruminant Blood Meal was mixed 25.00 lower to 50.00 higher, mostly 25.00 higher. Feather Meal was 10.00 to 35.00 lower. Menhaden Fishmeal was steady. 
    • Corn Hominy was steady to 1.00 higher, mostly steady. Gluten Feed was fully steady. Corn Gluten Meal was mixed 25.00 lower to 10.00 higher, mostly 5.00-10.00 lower. 
    • Distillers Dried Grain was mixed 5.00 lower to 3.00 higher, mostly steady to 5.00 lower. 
    • Wheat Middlings were mixed 5 lower to 25.00 higher, mostly 10.00 to 25.00 higher. Wheat millrun was mixed 1.00 lower to 4.00 higher.

    .
    Bullish/Bearish Consensus
    .
    The theory behind the "Bullish/Bearish Consensus" indicator is when the public reaches a consensus, they are usually wrong:
    • They get too bullish after prices have risen, and too bearish after they have already fallen.
    Because of this tendency, there are often extremes in opinion right before major changes in trend:
    • When the public reaches a bullish extreme, i.e., a great majority thinks prices will keep rising, then prices often decline instead. 
    • And when they become too bearish, then prices tend to rise.
    So when Public Opinion moves above the red dotted line in the chart, it means that compared to other readings over the past year, you're seeing excessive optimism. You also want to look at the absolute level of Opinion, too - if it's at 90%, then there's no question we're seeing an historic level of bullish opinion.  Watch for readings above 80% (or especially 90%) to spot those dangerous times when the public is overly enthusiastic about a commodity.

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

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    Bullish/Bearish Consensus: Cattle
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    .

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    Bullish/Bearish Consensus: Corn
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    ,

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    Stock Markets & Economic News
    .
    Stocks slumped into the close of trading but posted gains for the week as a whole, helped by continued monetary stimulus and strength in the prices of oil and other commodities. The small-cap Russell 2000 Index performed best and managed to establish a new high for the year -- although it remains the sole major benchmark unable to top its 2015 high.

    The Federal Reserve’s monetary policy meeting on Wednesday and its decision not to raise interest rates seemed to be the primary driver of market sentiment during the week. The Fed’s decision to remain on hold was mostly expected, but T. Rowe Price traders noted that investors appeared to be cheered by a less “hawkish” tone in the post-meeting press conference held by Fed Chair Janet Yellen. Yellen noted that slowing productivity growth had caused Fed officials to lower their long-term growth expectations for the U.S. economy, even as she noted that economic conditions had improved in recent months. The Fed is expected to raise interest rates by the end of the year, but will likely hold off on raising rates at their next meeting in November, which comes on the eve of the presidential election.

    While seeming to provide an overall boost to the market, the Fed’s decision not to raise rates had disparate effects on individual sectors. Financial services stocks lagged as investors were disappointed that lending margins would not soon increase, but utilities and real estate investment trusts (REITs) saw gains as their high dividend yields remained attractive relative to bond yields. Materials and energy stocks also got a boost as the U.S. dollar declined after the Fed meeting -- many commodities are priced in dollars, helping lower costs and boost demand as the dollar weakens. Oil prices also rose at midweek on news of healthy demand and inventory drawdowns in the U.S.

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

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    Looking Ahead
    .
    During the next 5 days (September 22-26), most dryness or drought areas east of the Mississippi River are not expected to receive significant rainfall. Beneficial rain is, however, forecast for some areas west of the Mississippi River, including the southern Plains (2-3 inches), and from the northern High Plains and northern Rockies southward across northern Utah (1.5 to locally as much as 6.0 inches). 

    During the 6-10 day period, September 27-October 1, odds favor above-median precipitation across the south-central contiguous U.S., peninsular Florida, and the Upper Mississippi Valley/Dakotas region. Odds favor below-median precipitation for portions of the mid-Atlantic, Carolinas, northern Georgia, and eastern parts of Kentucky and Tennessee. Below-median precipitation is also favored for most areas west of the eastern slopes of the Rockies.

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    USDA August Livestock Slaughter Report
    .
    Record Commercial Red Meat and Pork Production for August

    Commercial red meat production for the United States totaled 4.43 billion pounds in August, up 14 percent from the 3.90 billion pounds produced in August 2015.

    • Beef production, at 2.26 billion pounds, was 17 percent above the previous year. Cattle slaughter totaled 2.75 millionhead, up 18 percent from August 2015. The average live weight was down 11 pounds from the previous year, at1,352 pounds.
    • Veal production totaled 6.1 million pounds, 6 percent below August a year ago. Calf slaughter totaled 40,900 head, up 19 percent from August 2015. The average live weight was down 63 pounds from last year, at 255 pounds.
    • Pork production totaled 2.15 billion pounds, up 10 percent from the previous year. Hog slaughter totaled 10.39 million head, up 11 percent from August 2015. The average live weight was down 2 pounds from the previous year, at 276 pounds.
    • Lamb and mutton production, at 12.6 million pounds, was up 7 percent from August 2015. Sheep slaughter totaled 193,700 head, 11 percent above last year. The average live weight was 130 pounds, down 4 pounds from August a year ago.
    January to August 2016 commercial red meat production was 32.7 billion pounds, up 3 percent from 2015. Accumulated beef production was up 6 percent from last year, veal was down 8 percent, pork was up 1 percent from last year, and lamb and mutton production was down slightly. 
    ..

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    Feedyard Closeouts: Profit/(Loss)
    .
    .
    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 150 days ago = April 26th
    • Projected Profit/(Loss) based on the futures when placed on feed: ($102.66)
    .
    Cost of 750 lb. steer delivered to the feedyard @ $146.76 per cwt. 
    $1,100.70
    Cost of gain* for 600 lbs. @ $73.95 per cwt.
    $443.70
    Interest** @ Prime + 2% on cattle cost for 150 days
    $24.88
    Interest** @ Prime + 2% of the feed cost for 150 days
    $5.01
    Total Cost & Expense
    $1,574.29
    .
    Sale proceeds: 1,350 lb. steer @ $107.00 per cwt.
    $1,444.50
    .
    This week's Profit/(Loss) per head
    ($129.79)
    .
    Profit/(Loss) per head for previous week
    ($127.57)
    Change from previous week
    -$2.22
    .
    Sale price necessary to breakeven
    $116.61
    .

    .
    Projected closeout for steers placed on feed this week:
  • Projected Sale Date @ 150 days on feed = February 20th
  • Cost of 750 lb. steer delivered to the feedyard @ $136.54 per cwt.
    $1,024.05
    Cost of gain* for 600 lbs. @ $72.34 per cwt.
    $434.04
    Interest** @ Prime + 2% on cattle cost for 150 days
    $23.15
    Interest** @ Prime + 2% of the feed cost for 150 days
    $4.91
    Total Cost & Expense
    $1,486.14
    .
    Sale proceeds: February Live Cattle Futures @ $107.10 per cwt.
    $1,445.85
    .
    Projected Profit/(Loss) per head
    ($40.29)
    . .
    Projected Profit/(Loss) per head for previous week
    ($3.52)
    Change from previous week
    -($36.77)
    .
    Sale price necessary to breakeven
    $110.08
    .

    .
    *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
    .

    .
    ,.

    .
    Typical closeout for steers sold this week and hedged when placed on feed: ($102.66)
    Typical closeout for un-hedged steers sold this week:($129.79)
    Projected Profit/(Loss) based on the futures & estimated Cost of Gain this week: ($40.29)
    ,.

    .
    ..

    ...
    Slaughter Cattle
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    Friday in Nebraska trading has been slow to moderate on moderate demand. A few live and dressed sales have sold at 106.00 and from 166.00 to 168.00, respectively. In the Western Cornbelt trading has been slow on light to moderate demand. A few live and dressed sales have sold at 105.00 and from 165.00 to 168.00. In Kansas and Colorado trading has been mostly inactive on very light demand. In the Texas Panhandle trading has been at a standstill. Not enough sales in any major feeding region for a market trend. Last week live sales sold at 110.00 in the Southern and Northern Plains. Dressed sales in Nebraska sold at 170.00. In the Western Cornbelt for the prior week live sales sold at 107.00 and dressed sales sold at 170.00.

    Livestock Slaughter under Federal Inspection:
                                    CATTLE     CALVES    HOGS         SHEEP
    Friday   (est)            107,000      2,000          433,000          7,000
    Week ago (est)       109,000      2,000          399,000          7,000
    Year ago (act)         111,000       2,000         421,000          7,000
    Week to date (est)  560,000      9,000      2,189,000         38,000
    Last Week (est)      551,000      9,000       2,143,000        39,000
    Last Year (act)        560,000      9,000       2,120,000        42,000

    Saturday   (est)         32,000         0               277,000             0
    Week ago (est)         53,000         0               210,000            0
    Year ago (act)           14,000         0               162,000           3,000
    Week to date (est) 592,000       9,000      2,466,000         38,000
    Last Week (est)      604,000       9,000      2,353,000         39,000
    Last Year* (act)       574,000       9,000      2,283,000         45,000
    2016 YTD           21,737,000   325,000   83,837,000    1,457,000
    2015 *YTD         20,819,000   317,000    83,172,000   1,463,000
    Percent change      4.4%            2.5%           0.8%             -0.4%

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    Corn Crop Harvested
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    National Grain Summary
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    Compared to last week, grain and soybean bids were mostly higher.  However, the highs were limited as early yields were better than expected.  Soybeans saw strength from on-going demand. Wheat saw support from news of Egypt easing on zero percent ergot restriction.  The harvest is underway in parts of the southern Plains and Midwest after being delayed last week due to heavy rain.  The crop condition ratings for corn and soybeans held steady at 74 percent and 73 percent good to excellent condition, respectively.  53 percent of the corn crop is mature, with 9 percent harvested.  46 percent of soybeans are dropping leaves, with 4 percent of the crop harvested.  98 percent of spring wheat is harvested, with 17 percent of winter wheat planted. 

    Weekly export sales and shipments for wheat were bullish coming in at 30.6 million bushel and 20.3 mb, respectively.  Corn export sales were bullish and were listed at 36.5 mb, with shipments at 53.3 mb.  Export sales for soybeans totaled 32.2 mb, with shipments at 29.0 mb which was neutral.  Wheat was mostly 4-20 cents higher.  Corn was mostly 6-12 cents higher.  Sorghum was 11-12 cents higher.  Soybeans were 18-26 cents higher, with Illinois trading 4-14 cents lower.

    China said on Friday it is slapping anti-dumping duties on U.S. distillers' dried grains (DDGS) shipped by some of the biggest suppliers of the animal feed ingredient, including Louis Dreyfus and Archer Daniels Midland.

    The duties of 33.8 percent are effective immediately, the Ministry of Commerce said in a preliminary ruling. The move comes after a months-long probe following complaints by China's ethanol producers that the U.S. industry was unfairly benefiting from subsidies.

    Corn Futures Summary: Corn futures settled fractionally to just over a penny lower today. For the week, December corn futures dropped 1/2 cent. Increased harvest activity will limit buyer interest in the corn market next week and could weigh on futures, especially if soybeans face more heavy price pressure. Aside from harvest results, price direction will come from Friday's Quarterly Grain Stocks Report. That report has a history of producing big market moves.

    Soybean Futures Summary: Soybean prices fell 17 1/4 to 21 1/2 cents through the August 2017 contract. The November contract closed about 13 cents lower for the week. Widening interior basis prompted by the start up of harvest will likely continue to weigh on futures next week. Demand is large, but the availability of new-crop supplies will likely dominate market attitudes next week. Traders are also keeping an eye on the weather, but for the time being, aren't overly concerned about harvest delays in Iowa, Minnesota and Wisconsin.

    Wheat Futures Summary: SRW wheat futures ended steady to fractionally weaker today, while HRW contracts were fractionally firmer and spring wheat was fractionally to 2 1/2 cents higher. For the week, December SRW futures closed about a penny higher. Wheat futures will likely remain in their tight trading range. The HRS harvest is all but down, easing harvest pressure. But export sales will likely remain light. Traders will turn their attention to the Small Grains Summary and Quarterly Grains Stocks Reports due next Friday.

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    Five Year Moving Average - Corn & Wheat
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