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The Cattle Range Weekly Market Summary provides market data for the informed cattleman. Current industry news & commentary as well as a comprehensive comparison of the past week's prices from around the country in comparison to the previous week, month, 6 months ago, 1 year ago, & 5 year average.  The data is compiled from a variety of sources and is organized to provide insight in determining market movement and trends.
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SAMPLE... Market Summary for the week ending August 8th:
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  • Bullish: Nothing has changed -- The fundamentals for a strong market remain in place.
  • Bearish: In the end, for any product, service, or commodity, the consumer determines how high prices go.
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The Cattle Range 10-Day Market Trend:
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An indicator of overall cattle market strength. The angle indicates direction & velocity of the trend.
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The Trendline is based on daily market factors for the past 10 days.
The daily factors are the weighted aggregate totals of the Gain/(Loss) for 10 major market indicators compared to the previous trading day.
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National Feeder & Stocker Cattle Weekly Summary:
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RECEIPTS:    Auctions  Direct  Video/Internet    Total
This Week     137,800     62,300        48,000            248,100 
Last Week     134,900     38,000       108,800           281,700 
Last Year       140,100     43,800       221,500           405,400
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Compared to last week, feeder steers and heifers ended the week mostly steady after opening the trading session steady to 4.00 higher.  Stocker cattle and calves sold firm to 5.00 higher with renewed grazing interests after recent rains in the central portions of the US.  Russia’s midweek decision to ban all food imports from the United States, stemming from the sanctions imposed over the crisis in the Ukraine, sent CME cattle futures limit-down on Thursday and Friday.  Never mind that Russia has purchased little or no beef from the United States since 2012 and they rank as our 23rd best food customer.  Some pressure could be lent from the fact that they will be importing less competing proteins, but more likely the situation offered a good excuse for speculators and trending investors to sell-off a top-heavy commodity. 

The extent of the blow has not yet been felt in the cash feeder market with most sales taking place early in the week and direct trading shut off late in the week.  Needless to say, pressure will be felt in the Monday auction markets but as current as producers are in their marketing, receipts are sure to be light next week.  Didn’t we know that it would be something that has nothing to do with cattle that would trip this runaway market.  Buyers and sellers alike will probably wait until the futures find a stopping (or at least slowing down) place before they conduct much business. 

Things were still pretty optimistic in Mitchell, SD on Thursday with a big load of thin-fleshed 900 lb steers bringing 224.00 or 2016.00 per head.  Wednesday the St. Joseph, MO Stockyards sold a half load of gaunt (empty cut-in-two) 814 lb steers that lit-up the scoreboard at 236.25.  Calf buyers were also aggressive with adequate moisture in many areas and abundant hay meadows to clean-up after harvest and before wheat pasture arrives.  Bull haulers have been a premium in Kansas with droves of Flint Hill cattle moving off double-stocked pastures the last few weeks and into feedlots. 

Other major grazing areas will see a steady flow of yearling feeders moving from now through October.  There’s as much as a 50.00 price spread on these cattle depending on when they sold them and some early contractors showed up at the scale-house with an empty feeling in their gut, just waiting to see how much they left on the table.  Feedlots have lost 5.00-6.00 in the last two weeks with this week’s showlists trading at 160.00.  Is the 166.00 record price a level that we will remember for a long time to come?  This week’s reported auction volume included 45 percent over 600 lbs and 38 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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Selected Auction Reports:
"Click" on individual auction links for complete report
Oklahoma National Stockyards - Oklahoma City OK...
Actual Receipts:  5228     Last Monday:  4782     Year Ago Monday: 4827
Compared to last week: Feeder steers 2.00-5.00 higher.  Feeder heiferslightly tested and limited sales steady.  Demand remains very good as numbers continue to be limited.  Steer and heifer calves mostly 6.00 to 10.00 higher.

El Reno Cattle Narrative - El Reno OK
Receipts:  4455    Last Week:  4507    Year Ago:  4403
Compared to last week:  Feeder steers and heifers sold mostly steady;however a higher undertone was noted on steers over 950 lbs.  Calves sold 6.00-8.00 higher on limited comparable offerings.

Joplin Regional Stockyards Feeder Cattle Wtd Avg - Carthage MO
Receipts:  5119    Last Week:  3360    Last Year:  2157
Compared to last week, steers and heifers steady.

Tulia Livestock Auction - Tulia TX
Receipts:  1039    Last Week:  860    Year Ago:  792
Compared to last week:  Feeder steers and heifers sold mostly steady to instances weak on limited comparable sales.  Slaughter cows and bulls sold steady to 3.00 higher especially on high dressing cows.

Cattleman's Livestock Auction - Dalhart, TX
Cattle and Calves: 712        Week ago: 485         Year Ago:  638
Compared to last week:  Feeder steers and heifers on offer were mostly attractive, there was good buyer participation and prices on the day reflected such.  A few packages of steers and heifers under 600 lbs sold firm with most offerings being 5.00-10.00 higher compared to last weeks limited numbers.  Feeder steers over 600 lbs firm; not enough feeder heifers over 600 lbs for a market test.  Slaughter cows 2.00 higher, slaughter bulls not well tested.

Clovis Livestock Auction - Clovis NM
Receipts:  1234           Week Ago: 1092           Year Ago: 1397
Compared to last week:  Feeder steers unevenly steady except 500-600 lbs 5.00 higher, heifers 1.00-6.00 higher on comparable sales. Compared to last month Holstein steers 4.00-5.00 higher on comparable sales.  Slaughter cows 1.00-3.00 higher, bulls 4.00 higher.

Toppenish, WA Livestock Auction - Toppenish WA
Receipts:  1530    Last Week:  1525    Year Ago:  975
Compared to last Thursday at same sale, stocker and feeder cattle 15.00-20.00 lower.  Slaughter cows and bulls 3.00-5.00 lower.

Farmers & Ranchers Livestock Commission Co. - Salina KS
Receipts:  3630      Last Week:  3986     Year Ago:  2997
Compared to last week: Steers 750-950 lbs 2.00-8.00 lower; 750 lbs and under limited supply higher undertones noted. Heifers 7500-900 lbs 5.000 lower; 700 lbs and under not enough for a market test lower undertones noted.

Mitchell Livestock Wtd Avg Report - Mitchell SD
Receipts:  3611    Two Weeks Ago:  3457    Year Ago:  2809
Compared to two weeks ago:  Feeder steers 5.00 to 10.00 higher.  Best comparison of feeder heifers were those weighing 750-800 lbs and 850-900 lbs which sold 3.00 to 4.00 higher.

Weekly Auction Summaries:
"Click" on individual links for complete report
Tennessee Weekly Auction Summary
Receipts on 11 TN Auctions 7,591 12 Last Week 7,900 8 Last Year 6,200
Trends:  According to the Federal-State Market News Service, comparedto the same sales one week ago, slaughter cows 1.00 to 2.00 lower.Slaughter bulls 1.00 to 2.00 higher. Steers/bulls steady to 4.00higher. Heifers steady to 5.00 higher.

Mississippi Weekly Livestock Summary
Cattle Receipts:    8,702       Last Week:      6,715       Last Year:   7,289
Compared to last week, slaughter cows sold mixed and bulls sold steady. Feeder steers sold 5.00 to 10.00 higher and heifers sold steady.

Alabama Auctions Weekly Summary
Total estimated receipts this week 17,600, last week 13,729 and 18,037 last year.
Compared to one week ago: Slaughter cows and bulls sold steady to 1.00 higher. Replacement cows and pairs sold mostly steady. All feeder classes sold steady to 5.00 higher.

Georgia Cattle Auctions Weekly Review
Cattle receipts at 25 markets 12,488 compared to 9,826 last week and9,179 year ago.
Compared to one week earlier, slaughter cows and bulls 1.00 to 2.00 higher, feeder steers mostly steady to 3.00 higher, bulls 3.00 to 4.00 higher, heifers steady to 3.00 higher, steer calves mostly 3.00 to 5.00 higher, bull calves 3.00 to 6.00 higher, heifer calves 2.00 to 4.00 higher, replacement cows steady to 2.00 higher.

Colorado Auction Feeder Cattle Summary
Receipts: 1,716        Last Week 3,487        Last Year 6,040
Compared to last week: Not enough comparable sales on feeder steers or heifers for a market trend.

Direct Sales of Feeder & Stocker Cattle:
"Click" on individual links for complete report
AZ-CA-NV Weekly Feeder Cattle Review (Fri)
Confirmed: 19,150 
Compared to last week, Trade active, demand good.

Colorado Direct Feeder Cattle Report (Fri)
Receipts: 1,716        Last Week 3,487        Last Year 6,040 
Compared to last week: Not enough comparable sales on feeder steers or heifers for a market trend.

Eastern Cornbelt Direct Feeder Cattle Summary (Fri)
Reported sales this week: 430    Last Week: 124    Last year: 0
Compared to last week: Feeder steers not enough comparable sales due to last week light offering but a higher undertone noted.

Georgia Direct Cattle Summary (Fri)
Confirmed sales on 2,672 head

IA-South MN Direct Feeder Cattle Weekly (Mon)
Receipts:  185    Last Week:  0    Year Ago:  1225
Compared to last week, no feeder steers reported for a market trend.

Kansas Direct Feeder Cattle Summary (Fri)
Receipts:  2023    Last Week:  2875    Year Ago:  4972
Compared with last week: in a limited test Steers and heifers steady with last week's advance.

Montana Direct Feeder Cattle Wtd Avg (Fri)
Receipts:  0    Last Week: 550    Year Ago:  0
Compared to last week:  No trend available for feeder steers and heifers due to last weeks limited supply.

New Mexico Feeder Cattle Report (Mon)
Receipts:  900    Last Week:  700    Year Ago:  700
Compared to last week:  Feeder steers sold 1.00-2.00 lower on a very limited test.  Feeder heifers were not tested this week.

Northwest Wtd Avg Direct Feeder Cattle Report (Fri)
Receipts:  1637    Last Week:  2303    Year Ago:  NA
Compared to last week, feeder cattle mixed, with 600-800 lb. steers steady to 5.00 higher and 900 lb. steers steady to 5.00 lower while 500-700 lb. heifers remained steady and 800-900 lb. heifers were 5.00-10.00 higher.

Oklahoma Direct Feeder Cattle (Fri)
Receipts:  3170    Last Week:  3625    Year Ago:  3378
Compared to last week:  Feeder steers and heifers were lightly tested on current FOB offerings but a higher undertone noted.

South Dakota Direct Feeder Cattle Summary (Fri)
Receipts: 1825         Last Week: 310          Last Year: 1500 
Compared to last week:  No trend available for feeder steers or heifers due to limited comparable sales.

WY, Western NE & Western Dakotas Direct Feeder Cattle Wtd Avg (Fri)
Receipts:  9,562   Week Ago: 3,196   Year Ago: 810 
Compared to last week, yearling steers sold fully steady to 2.00 higher on early week trades.

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Cattle Futures:
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Weak country trade apparently sparked another break in cattle futures. CME cattle prices plunged Thursday in response to news of weak Nebraska trading Wednesday afternoon. Western Plains cash prices subsequently fell even farther, which probably explained the follow-through Chicago dive posted Friday. October and December live cattle futures plummeted the daily 3.00-cent limit to 150.00 and 150.25 cents/pound, respectively, at their week-ending close. Meanwhile, September and November feeder futures posted respective 3.00-cent crashes to 214.72 cents/pound and 212.60 cents/pound.
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Representative Sales of Cow & Pairs:
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  • El Reno, OK
    • Bred Cows:  Medium and Large 1-2 3-8 yrs 1050- 1450 lbs 5-7 months 1750.00-2550.00.  Medium and Large 2  8-10 yrs 1050-1400 lbs 5 months 1395.00-1475.00. 
    • Pairs:  medium and Large 1-2  5-8 yrs 1000-1400 lbs w/100-350 lb calves 1800.00-2700.00.
  • Oklahoma City, OK
    • Bred Cows:  Medium and Large 1-2  5-6 yrs 1050-1150 5-7 months 1975.00-2400.00.  Medium and Large 2  7-10 yrs 3-7 months 1000-1350 lbs 1375.00-1700.00. 
  • Joplin, MO
    • Bred Cows:  Medium and Large 1-2  2-5 yrs 1000-1350 lbs 2nd-3rd stage 2300.00-2700.00, balance 1850.00-2100.00, 1st stage 2-5 yrs 1010-1350 lbs 1665.00-1950.00; short solid mouth to aged 2nd-3rd stage 1100-1285 lbs 1620.00-1950.00.  Large 1-2  2-6 yrs 2nd-3rd stage 1250-1500 lbs 2300.00-2600.00.  Medium and Large 2  4-7 yrs 2nd-3rd stage 950-1295 lbs 1700.00-1900.00. 
    • Pairs:  Medium Large 1-2  2 yrs to short solid mouth 995-1250 lbs w/180-395 lb calves 2600.00-3000.00; short solid mouth 1090-1100 lbs w/225-390 lb calves 2300.00-2450.00.  Medium and Large 2  2-6 yrs 800-1200 lbs w/baby to 150 lb calves 2200.00-2350.00. 
  • Springfield, MO
    • Bred Cows:  Medium and Large 1-2  2-7 yrs 975-1300 lbs 2nd-3rd stage 1875.00-2275.00, 1st stage 895-1165 lbs 1525.00-1800.00; 7 yrs to aged 2nd stage 1125-1260 lbs 1400.00-1650.00.  Large 1-2  6-7 yrs 2nd-3rd stage 1380-1635 lbs 1750.00-1785.00.  Medium and Large 2  4 yrs to short solid mouth 2nd stage 1215-1280 lbs 1650.00-1800.00. 
    • Pairs:  Medium and Large 1-2  4-6 yrs 1170-1285 lbs w/baby to 500 lb calves 2500.00-2850.00; 7 yrs to aged 1315-1360 lbs w/baby to 435 lb calves 2150.00-2200.00.  Large 1-2  7 yrs to short solid mouth 1400-1470 lbs w/baby to 425 lbs 2600.00-2625.00. Medium 1-2  2-6 yrs 820-980 lbs w/baby to 170 lb calves 1900.00-2300.00. 
  • West Plains, MO
    • Bred Cows:  Medium and Large 1-2  2-7 yrs 950-1475 lbs 2nd-3rd stage 2000.00-2600.00, consignment 44 hd 2 yrs 1050-1180 lb blk hided 2nd-3rd stage 2800.00; 7 yrs to short-solid 1050-1450 lbs 2nd-3rd stage 1800.00-2150.00.  Medium and Large 2  2-7 yrs 915-1390 lbs 1st-3rd stage 1700.00-1950.00; Short-solid to broken mouth 960-1355 lbs 1st-3rd stage 1550.00-1750.00.  Medium 2  3 yrs to broken mouth 810-1135 lbs 1st-3rd stage 1100.00-1550.00. 
    • Pairs:  Medium and Large 1-2  2-6 yrs 1030-1180 lbs w/150-300 lb calves 2525.00-3000.00; 7 yrs to short-solid mouth 1015-1240 lbs w/150-250 lb calves 2050.00-2300.00.  Medium and Large 2  4-7 yrs 820-1370 lbs w/100-200 lb calves 2000.00-2400.00.  Medium 2   7 yrs to broken-mouth 740-970 lbs w/100 lb calves 1450.00-1700.00.
  • Roswell, NM
    • Bred Cows:  Medium and Large 1-2 Young 825-1060 lbs 3-6 months 1500.00-1625.00.  Small Frame: 2-3 Young 655-900 lbs 3-8 months 800.00-1110.00. 
    • Pairs: Medium and Large 1-2: Young 800-1050 lbs w/100-250 lb calves 2050.00-2475.00; middle aged 950-1200 lbs w/250-300 lb calves 1875.00-2375.00. 
  • Arkansas
    • Bred Cows:  Medium and Large 1-2  650-900  heiferettes 140.00-150.00; 2-7 yrs 850-1250 lbs 2nd-3rd stage 140.00-150.00 cwt, 1700.00-1800.00; 7-10 yrs 800-1200 lbs 2nd-3rd stage 127.00-137.00 cwt; 1550.00-1650.00. 
    • Pairs:  Medium and Large 1-2  3-7 yrs 800-1200 lbs w/100-200 lb calves 1850.00-1950.00; few to 2350.00; w/200-300 lb calves 2025.00-2125.00; 7-10 yrs w/100-200 lb calves 1825.00-1925.00.  Small 1 and Medium 2  7+ yrs 750-900 lb calves w/100-200 lb calves 1350.00-1450.00. 
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Bred Cows & Heifers in 2nd & 3rd Stages of Pregnancy:
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The average prices above are from USDA market reports which seldom reference breed or quality.
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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 2.00-8.00 lower than reported sales and bids last week. All reported sales were to local buyers this week while inquiries from the US were limited. For the most part showlist volumes have been cleaned up.
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Canadian Weekly Cattle Report:
Provided by CanFax

Fed market still strong

  • Chicago live cattle set a new record July 30 but then fell sharply.
  • Alberta packers remain short bought, facing negative processing margins.
  • Buyers have become more disciplined as basis levels have weakened.
  • Cash trade was too small to establish average prices.
  • Grid and formula priced cattle must be fetching prices comparable with the cash market because no cattle are going onto the open market.
  • Dressed bids were steady to $5 per hundredweight higher but were not enough to generate significant selling interest.
  • Even with record prices, many feedlots say cattle simply need more days on feed.
  • Packers are maintaining slaughter volumes at last year’s pace.
  • Weekly western Canadian fed slaughter to July 25 was 35,645 head, which was the largest kill in the month. However, packers could eventually be forced to slow chain speeds because of the tight supply of market ready cattle.
  • Weekly fed exports fell 14 percent to 4,913 head, which was 52 percent larger than last year.
  • Packers will be calling upon August contract cattle, which could moderate interest in the cash market.
Cows set record
  • Insatiable summer hamburger demand continued to drive non-fed prices higher.
  • D1, D2 cow prices ranged $115-$134 per cwt. to average $125.33, up $4.50. D3 prices ranged $102-$119 to average $110.67.
  • Rail grade ranged $235-$240.
  • Butcher bull prices rose $1 to average $132.44.
  • Weekly western Canadian non-fed slaughter to July 26 rose 10 percent to 5,774 head.
  • Weekly non-fed exports to July 19 rose five percent to 5,379 head.
Feeders set records
  • Strong North American buying competition continued to rally feeder prices to new records.
  • Alberta average steer prices rose $6.63 per cwt. and heifers rose $4.83.
  • Stockers 400-500 pounds jumped $15-$20 per cwt. as strong prices and dwindling pasture brought larger groups of quality calves to town.
  • Steer calves 400-600 lb. are trading more than $150 higher than the same week last year.
  • Feeders heavier than 600 lb. were $2-$4 higher than the previous week.
  • Feedlots focused mainly on securing as many yearlings as possible with little regard for quality.
  • Their anxiety is rising over anticipated tight fall feeder supplies and increased buyer competition from the United States.
  • Alberta auction volume almost doubled to 13,901 head.
  • Feeder exports to July 19 rose 36 percent to 2,288 head.
  • Some pasture conditions have deteriorated in the recent heat, which could push more cattle to market.
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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 $0.9155 U.S. dollars
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Prices for the week ending August 1st:
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Russia Bans Western Food Imports in Ukraine Sanctions Retaliation:
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On Thursday morning, the Russian government announced a one-year prohibition of the importation of certain food and agricultural products from the United States, Canada, European Union, Norway and Australia. Fresh and frozen beef products are included on that list, but this should come as no surprise.

Russia has effectively banned U.S. beef imports since early 2013 by placing arbitrary restrictions on the use of growth promotants, including beta agonists and hormones. Prior to the ban, Russia was one of our top 10 export markets accounting for $300 million in beef and beef product sales in 2012. 

In response to tensions over Crimea and Ukraine, the U.S. and other NATO members have increased economic sanctions against Russia. In return, Russia has been actively using its own regulatory schemes to restrict imports from Ukraine and other former Soviet states who have allied themselves with the West.

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Geo-Political Tensions Send Livestock Futures Tumbling:
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Thanks to the domino effect of fear in our 24/7 news cycle world, CME livestock futures have taken out key chart points and in  case of cattle, widened an already vast basis. 

It matters not that we send virtually no beef to Russia and not nearly the poultry we used to, Putin retaliated with multiple food import sanctions against the U.S., Canada, the EU and Australia and fear of the economic implications pressured CME futures and global stock markets overnight. 

And if that isn’t enough, a U.S. airstrike against militants in Iraq has everyone on edge, though U.S. stock markets are mildly higher now. 

Markets loathe uncertainty and traders are abandoning longs. And it’s the outside money, funds and the like, who have carried some of the bigger long positions during the Bull of 2014. And they must preserve capital.

Once a market starts to unwind, there’s nothing that can be done until those that want out are out. And new buyers have no interest in stepping in front of a runaway freight train. 

What About the Real World?

Cash fed prices, after a one-off steady trade of $164 before the sell off occurred, traded lightly at $161 and $255 dressed. As the futures sell off continued, a few more traded at $160, a few $159, then 158 in the north; dressed $253. Volume has been light but is picking up a little now. The choice cutout is very modestly lower for the week. Packer margins at after this week’s cheaper cash buy will widen $20-40 per head depending on the pace of further decline in cutout prices next week. 

Is the Long-Term Bull Still Alive?

Technically, the market has not destroyed the long term uptrend. But this break has been ugly enough to cause even the most ardent long term bull to rethink how to survive the next 60 days in order to be well positioned for further up later this year. 

Bring On the Weekend

Sometimes the best remedy for an emotional rout like this one is time off to clear heads. Next week’s action will tell us a great deal about this market if futures can find their footing near today’s lows.

The Beef

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Is Beef Going to Become the New Lobster?

The article below was taken from the AtlantaMagazine.com website.  TCR believes this is a harbinger of what is to come in the near future, i.e., Most restaurants being forced to significantly raise prices, which will definitely impact beef demand.

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For Stuart Baesel, beef isn’t just what’s for dinner. It’s his livelihood. As a co-owner of one of Atlanta’s favorite barbecue joints, Community Q BBQ, Baesel relies on a consistent supply of beef to run his business. But in recent months, he’s had to raise his prices -- something he hasn’t done in four years -- in response to the soaring price of beef.

“All prices are going up, but beef is definitely standing out the most. It’s going up leaps and bounds,” he says.

Just how much? Take brisket, for example, the price of which has nearly tripled, rising especially fast in the last six to eight months. “We’re losing money on brisket, period,” Baesel says. Only regular customers might notice the menu’s climbing brisket prices, but it’s harder to ignore the note on the front door, explaining that the beef rib is no longer offered at all.

The fact that beef prices are at a record high -- ground beef at an average of $3.85 per pound -- is no secret.  The cost of ground beef has increased 11 percent since last spring, with no signs of slowing down. Most economists and industry insiders squarely place the blame on multi-year droughts, which have parched the once-lush grass fields in many cattle-producing areas. With no grass to feed their cows, farmers are being forced en masse to liquidate their herds -- the euphemism for slaughter -- and as a result, the population of the U.S. cattle herd is now the smallest it’s been since the 1950s: a paltry 87.7 million, strikingly small when compared to the 132 million cattle of the 1970s peak population. As supply levels have fallen, prices have skyrocketed.

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Photo of the Week:
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  • 100 Reg. Charolais Cows... E. Central NM*
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    Shootin' the Bull:
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    In my opinion, feedyards are going to have a tough row to hoe with the spread between the feeder cattle index and December live cattle.  As I write this, the spread is just shy of $72.00.  I do not anticipate corn being able to trade low enough to offset that spread.  Therefore, profit/loss margins are perceived reliant upon either the December contract rallying sharply, or the cash market remain well above $160.00 for the next 4 months.  Faced now with Russia's ban on meat imports, cattle are perceived feeling an indirect blow from this as the price for competing meats moves lower.

    Technical indicators all turned south this week and with cattle as the only commodity at historical highs, or even yearly highs, leaves them all by themselves in the commodity spectrum.  Hence further downside pressure is anticipated.   The basis has never been perceived as advantageous towards the ability to offset the sharply higher feeder cattle prices.  With it having widened sharply this week, it makes it even tougher.  While most articles I've read tend to shrug off the Russian embargo as not that important, I view it as significant with more pork and poultry coming to market in the very near future and beef prices all by themselves at historic prices, it won't take much to topple them. 

    Of most concern for backgrounders is the excessive cost of replacement inventory recently purchased that most likely should have gone into the feedyard instead of further backgrounding.  My analysis suggests that there is a portion of cattle that have been sold through sale barns or videos that should have been destined for a feedyard.  However, with pasture conditions favorable in some areas, these animals were diverted back to grass or a program.  Therefore, come this fall, those cattle are anticipated to be significantly larger in size, more of them, and now coming to market in what is perceived as a major reversal in feeder cattle prices.

    Backgrounders are urged to not ignore the two main factors of the sharp price decline in competing meats and the exceptional price spreads between feeders and fats.  Recall that the increase in working capital needs have been excessive and margins thin on the most recently procured inventory.  Everyone from the backgrounder to the lender is urged to not let something that they didn't anticipate create losses that had the potential to be mitigated. Technical indicators all turned south on the feeders.  With there having been an initial thrust lower from contract highs, three sideways trading days, and now a resumption in the decline, I recommend taking an astute stance to not let any further declines go unchecked without price protection.

    The change in the environment was seen late last week and early this week as option sellers began reducing the number of contracts available and widening bid/offer spreads to levels not perceived as advantageous.  There was reason to my madness for recommending rolling up put options when it appeared to be another waste of capital. Not that I knew prices would break this week, but that the environment was advantageous to do so.  Had prices for feeders continued higher, yes, the options would have continued to depreciate in value once again.  However, the lower premium exposed one to less price risk while still maintaining a minimum sale price.  Now that the cat is out of the bag, put option sellers want to be paid dearly for assuming your risk of downside price fluctuation.  If you have questions or would like more information, feel free to contact me at anytime.

    There is little to discuss on corn.  The crop is big and good.  The demand remains about the same.  I perceive it going to be difficult to push prices for corn much lower than the $3.60 area December until we get closer to harvest.  Even then, the ability to lose significant percentage is not anticipated due to it finding intrinsic value at some level. 

    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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    The Saga of Bart -- Trials & Tribulations of a Cattle Buyer
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    On a rainy night, two cattle buyers left the bar after a long night of strategizing and got into their car.   Bart was driving and he started it up.

    After a couple of minutes of driving, an old man's face appeared in the passenger window and tapped lightly. 

    Jake screamed, "Look at the window. There's an old ghost's face there!" Bart sped up, but the face stayed in the window. Jake rolled his window down part way and, scared out of his wits, said, "What do you want?"

    The old man softly replied, "You got a cigarette?" Jake handed the old man a cigarette and yelled, "Step on it," to Bart, rolling up the window in terror.

    A few minutes later they calmed down and started laughing. Bart said, "I don't know what happened back there, but don't worry -- the speedometer says we're doing 80 now." 

    But again, there was a light tapping on the window and the old man reappeared.

    "There he is again," Jake yelled. He rolled down the window and shakily said, "Yes?"

    "Do you have a light?" the old man quietly asked. Jake threw a lighter out the window saying, "Step on it!"

    They were driving about 100 miles an hour, trying to forget what they had just seen and heard, when all of a sudden there came some more tapping.

    "Oh my God! He's back!" Jake rolled down the window and screamed in stark terror, "WHAT NOW?"

    With a friendly tone, the old man asked, "You guys want some help getting out of this mudhole?"

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    Submit a "Bart Joke"  If we use it, you'll receive a $25.00 Gift Certificate to The Cattle Range Mercantile.
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    Breeders Have a Hayday:
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    To an outsider, record beef prices and record live cattle prices must mean wide margins and record bottom line profits for anyone in the cattle business. Unfortunately, it doesn't work that way. Processors and cattle feeders have struggled to make ends meet for the past few years. Margins have been skinny to non existent for many and facilities have closed and many are operating a half capacity. This is the nature of downsizing.

    One segment of the beef pipeline that has enjoyed a sustained windfall -- the breeder. While in some parts of the country, drought and high corn has at times interfered with margins, the last couple of years have been really good for breeders and there are few red flags on the horizon that will threaten a change in the near future. Good times won't last forever but many will be enjoying good times while they can.

    The econometric model of a cow/calf operation haven't undergone major changes in 100 years. Bulls and cows roam the nations grasslands, breeding and contributing a calf crop each year. Inputs include feed, medicine, care and grass leases. Improvements in breeding operations have been both operational and genetic. The result for many operations has been to increase the calf crop percentage while reducing the cost to produce the calf through operating efficiencies. Genetics has allowed weaning weights to increase.

    The profile of today's national breeding herd would reflect an overdependence on Angus cattle at the expense of improvements in red meat cutout. Quality grading confirms a steady straight line increase in cattle grading choice or better. The over reliance on Angus cattle has resulted in too many small frame blacks and the industry has lost some of the important advantages brought forth 25 years ago by the continental and exotic breeds. It is time for the pendulum to swing back.

    The bottom line for many breeders has been outstanding profits. Intense competition for a dwindling supply of cattle from stocker operators and feedlots has ratcheted up the price to today's record breaking level -- a level few operators ever imagined possible. Some breeders in certain geographic areas have struggled with drought and high corn, but many others have enjoyed boom years and more may be in store.

    This past year and the next couple will return $400-500/head profits on each cow and calf on the ranch. This type incentive will assure all current operators ramp up to full capacity and many new operations will incubate. Farmers looking at falling grain prices will seek to supplement income with breeding operations. The heifer retention for breeding will reach full capacity this year. The exaggerated current price structure will assure as rapid rebuilding as this industry has ever seen.

    Ag Center Cattle Report

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    Where Will Beef Herd Expansion Happen?
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    It is getting to be a well repeated story. Beef cow numbers are at their lowest level since 1962. Cattle and feeder cattle prices are at record highs and feed prices have dropped. Beef consumers continue to eat beef and are rewarding the beef industry with very profitable returns. So when are beef producers going to expand the breeding herd and in what regions of the country will that occur?

    To answer those questions we first look at the areas of the country that had the biggest reductions in beef cow numbers due to drought, high feed prices, and financial losses. Since 2007, beef cow numbers dropped by 12 percent totaling 3.8 million head. The biggest declines were in the region with the most cows-the Southern Plains- which accounted for 1.6 million of the decline. Texas, the big beef cow state, had a reduction of 1.4 million head, an astonishing 36 percent of the nation's total decline. That region's expansion opportunities are very mixed due to lingering drought.  About one-third of Texas remains in the three highest drought categories, D2-D4. Importantly, parts of cow-dense eastern Texas are now out of drought and the National Weather Service is forecasting some continued drought abatement by this fall for the region. In conclusion, lingering drought in the Southern Plains will tend to mean a slow expansion there.

    The second most important region for beef cows is the Southeast, which had an 822,000 head beef cow reduction since 2007, or 21 percent of the nation's total. The biggest reductions were in Tennessee and Kentucky and accounted for 59 percent of the region's decline. The Southeast is generally in good shape for pastures as the impacts of the 2012 drought have passed.

    The third most significant beef cow area is the Northern Plains, where beef cow numbers did not drop over the past seven years. This probably means that producers in that region will be expanding numbers with large amounts of grazing land. Lower returns to grain production are expected to bring some conversion of land back to grazing in coming years as well. The Central Plains are the fourth most important area and drought continues to linger in Kansas and parts of Nebraska, slowing their expansion.

    The fifth most important beef cow region is the Western Corn Belt from Minnesota to Missouri. That region had a reduction of 566,000 cows, or 15 percent of the national reduction. Over the last seven years this region has been most dramatically affected by the ethanol boom. Traditionally a low-grain price region, many farmers once talked of "walking" their corn to town in the form of value-added livestock. Now, hauling corn to the local ethanol plant is often the preferred marketing plan. The ethanol impact is much less important in Missouri, where more marginal land is suited to beef cows, so that state is expected to lead the coming expansion for that region.

    The rest of the country has a mixed situation. Severe drought in California and other parts of the West and Pacific Northwest are going to prevent expansion in some of those areas. On the other hand, the Eastern Corn Belt and the Northeast will see some expansion, but these have become relatively minor beef cow regions.

    The latest June Cattle inventory update from USDA does not answer the question of whether expansion is underway, since USDA was not funded to collect mid-year cattle inventory data one year ago. Numbers from January seemed to suggest that heifer retention was up two percent, signally expansion. But, the June inventory was two percent lower than two years-ago, providing inconsistent signals.

    Low slaughter numbers seem to be signaling that heifers are being pulled away from slaughter and toward breeding herd retention. The number of cattle processed this year is down seven percent, a number greater than would have been expected in the absence of expansion. Cow and heifer slaughter have been low as well.

    Finished cattle prices have reached record highs over $160 in recent weeks. In 2013, finished cattle prices averaged about $126. At the start of 2014, forecasts were for prices to average in the mid-$130's. Now, it appears the 2014 yearly average price will be close to $150. The mid-$150s are expected for the remained of the year, with prices dropping to the low-$150s for the first-half of next year.

    When will expansion begin and where will it occur? Clearly the profit incentive has returned more powerfully than expected. Pastures and ranges have returned in some regions and feed is more available. But drought is limiting forages in other significant areas. This means the national beef cow expansion will be slowed and that tight beef supplies will be with the country for several more years.

    Chris Hurt -- Purdue University

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    Margin between the Choice Boxed Beef Cutout & Feeder Steers:
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    5 Year Average: $46.00 --- This Week: $38.66
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    Out of Kilter:
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    A good way to determine if something is, “going on” in a market is by noticing when market relationships are out of kilter. Cattle and grains typically have a positive correlation. They tend to move in tandem. Moderately increase the price of corn and the cattle will follow suit. The opposite is also true as the cost of feed declines, so does the cost of production. However, when this relationship breaks down, its because one market can't keep pace or pass on the costs of the other. 

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

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

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

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

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    5 Year Moving Average:
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    Tick Bite That Can Make You Allergic to Red Meat:

    A bug can turn you into a vegetarian, or at least make you swear off red meat. Doctors across the nation are seeing a surge of sudden meat allergies in people bitten by a certain kind of tick.
     
    . . This bizarre problem was only discovered a few years ago but is growing as the ticks spread from the Southwest and the East to more parts of the United States. In some cases, eating a burger or a steak has landed people in the hospital with severe allergic reactions.

    Few patients seem aware of the risk, and even doctors are slow to recognize it. As one allergist who has seen 200 cases on New York's Long Island said, "Why would someone think they're allergic to meat when they've been eating it their whole life?"

    The culprit is the Lone Star tick, named for Texas, a state famous for meaty barbecues. The tick is now found throughout the South and the eastern half of the United States.

    Researchers think some other types of ticks also might cause meat allergies; cases have been reported in Australia, France, Germany, Sweden, Spain, Japan and Korea.

    Here's how it happens: The bugs harbor a sugar that humans don't have, called alpha-gal. The sugar is also is found in red meat - beef, pork, venison, rabbit - and even some dairy products. It's usually fine when people encounter it through food that gets digested.

    But a tick bite triggers an immune system response, and in that high-alert state, the body perceives the sugar the tick transmitted to the victim's bloodstream and skin as a foreign substance, and makes antibodies to it. That sets the stage for an allergic reaction the next time the person eats red meat and encounters the sugar.

    It happened last summer to Louise Danzig, a 63-year-old retired nurse from Montauk on eastern Long Island.

    Hours after eating a burger, "I woke up with very swollen hands that were on fire with itching," she said. As she headed downstairs, "I could feel my lips and tongue were getting swollen," and by the time she made a phone call for help, "I was losing my ability to speak and my airway was closing."

    She had had recent tick bites, and a blood test confirmed the meat allergy.

    "I'll never have another hamburger, I'm sure," Danzig said. "I definitely do not want to have that happen to me again."

    Allergic reactions can be treated with antihistamines to ease itching, and more severe ones with epinephrine. Some people with the allergy now carry epinephrine shots in case they are stricken again.

    Doctors don't know if the allergy is permanent. Some patients show signs of declining antibodies over time, although those with severe reactions are understandably reluctant to risk eating meat again. Even poultry products such as turkey sausage sometimes contain meat byproducts and can trigger the allergy.

    "We don't really know yet how durable this will be" or whether it's lifelong, like a shellfish allergy, Valet said.

    The meat allergy "does not seem to be lifelong, but the caveat is, additional tick bites bring it back," Commins said.

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    U.S. Beef & Pork Exports on Record Pace Through June:
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    U.S. pork and beef exports remained strong in June, pushing export value for both products to a record first-half pace according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
    • Beef exports were up 5 percent in volume (106,609 mt) in June and set a new monthly value record of $631.7 million (+12 percent). First-half export value also set a new record of $3.27 billion (+16 percent). Export volume was 585,953 mt in the first half, up 8 percent from a year ago but trailing the 2011 record.
    • June pork exports totaled 181,531 metric tons (mt), up 7 percent from a year ago, while export value increased 25 percent to $585.1 million. In the first half of 2014, pork export volume (1.15 million mt, +9 percent) and value ($3.4 billion, +17 percent) achieved record highs.
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    Slaughter Cows & Bulls:
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    Slaughter cows steady to 1.00 higher with exception of the central region being 2.00 to 5.00 higher.  Slaughter bulls 6.00-8.00 higher in the central region remainder of the auction saw trends of steady to 1.00 higher.  Packer demand remains good. 

    USDA's Cutter cow carcass cut-out value Friday morning was 230.23 -- Down 1.10 from last Friday.

                 %Lean   Weight     Wyoming         Oklahoma       Alabama
    Breakers  75-80%   1100-1600  122.00-125.00  124.00-131.00  107.00-112.00
    Boners     80-85%   1000-1450  120.00-130.00  126.00-133.00  109.00-114.00
    Lean        85-90%   1000-1300  104.00-112.00  121.00-130.00  100.00-105.00
    Bulls        88-92%   1300-2500  142.50-151.00  148.00-154.00  124.00-129.00

    Negotiated Sale of Packer Cows & Bulls:

                   Confirmed  Week Ago  Year Ago  Week to Date  Week Ago  Year Ago
    NATIONAL    5,666       5,105       6,938         28,918         28,194       36,528
    S CENTRAL  1,498        1,375       1,852           7,299          7,716         9,656
    N CENTRAL     367          227          807           1,977           1,459         2,376
    EAST           1,693       1,632       1,447            9,160          8,835        9,674
    WEST             877         914        1,520            5,185         5,069        7,208
    MIDWEST     1,231         957       1,312            5,297          5,115        7,574

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    Weekly Hay Reports: "Click" on links for detailed report
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    Weekly Feedstuffs Market Review:
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    The USDA Market News Service reports feed ingredient prices for the week ending August 05, were mixed. 
    • Soybean Meal was 9.00 to 27.20 lower. Cottonseed Meal was mixed, 40.00 lower to 5.00 higher, mostly steady.  Whole Cottonseed was steady to 35.00 higher. 
    • Canola Meal was 8.40 to 9.80 lower.  Linseed Meal was 30.00 lower in limited trade.  Sunflower Meal was 15.00 lower. 
    • Crude Soybean Oil was 28 to 143 points lower.  Crude Corn Oil was steady. 
    • Ruminant Meat and Bone Meal was mixed, 50.00 lower to 5.00 higher, mostly 5.00 to 25.00 lower.  Ruminant Blood Meal was 15.00 to 50.00 higher.  Feather Meal was steady to 25.00 higher. 
    • Corn Hominy was steady to 10.00 lower. Corn Gluten Feed was steady to 15.00 lower.  Corn Gluten Meal was steady to 30.00 lower.
    • Distillers Dried Grains were steady to 35.00 lower. 
    • Wheat Middlings were mixed, 10.00 lower to 20.00 higher.

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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, August 09, 2014 was estimated at 873.9 million lbs. according to the U.S.Department of Agriculture's Marketing Service. This was 1.3 percent higher than a week ago and 4.8 percent lower than a year ago.  Cumulative meat production for the year to date was 3.9 percent lower compared to the previous year.
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    Bullish/Bearish Consensus:
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    The theory behind the "Bullish/Bearish Consensus" indicator is when the public reaches a consensus, they are usually wrong:
    • They get too bullish after prices have risen, and too bearish after they have already fallen.
    Because of this tendency, there are often extremes in opinion right before major changes in trend:
    • When the public reaches a bullish extreme, i.e., a great majority thinks prices will keep rising, then prices often decline instead. 
    • And when they become too bearish, then prices tend to rise.
    So when Public Opinion moves above the red dotted line in the chart, it means that compared to other readings over the past year, you're seeing a statistically extreme value.  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 too 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
    Last Updated: August 5th
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    Bullish/Bearish Consensus - Corn
    Last Updated: August 5th
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    National Economic News:
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    Smaller-caps outperform in volatile week: Stocks registered gains for the week, with small- and mid-caps outperforming large-caps. The major indexes were volatile as investors reacted to political turmoil overseas, and as relatively light trading volumes accentuated price swings.

    Ukraine worries weigh on sentiment: Markets got off to a positive start on Monday, recovering a portion of their sharp losses from the end of last week. Sentiment quickly reversed, however, sending the markets sharply lower on Tuesday. The causes of the reversal were murky, but heightened worries over the situation in Ukraine may have been partly to blame. Indeed, on Wednesday, the Russian government announced that it was banning food imports from the U.S. and European countries in retaliation to sanctions imposed by the West.

    Eurozone worries continue: While most experts anticipated the bans to have only a minimal direct impact on European economies -- and an even smaller one on the U.S. -- new worries arose during the week about the overall health of the eurozone. Figures released Wednesday showed that Italy had lapsed back into recession for the third time in recent years. German manufacturing orders also declined sharply, which some observers traced to heightened caution due to the Ukraine crisis. An index of manufacturing activity in Germany showed a slight increase in July, however.

    Markets end week on positive tone: Some reassuring news on Ukraine helped markets end the week on a more positive note. On Friday morning, a Russian news agency reported that Russian officials were prepared to mediate in talks between the Ukrainian government and pro-Russian separatists, and Russian officials announced later in the day that they were ending military exercises along the border. These developments coincided with news of limited U.S. air strikes in Iraq, which investors seemed to take largely in stride.

    Good news on productivity: Encouraging news on the U.S. economy may have also played a part in the late rally. The Labor Department reported a surprisingly large rise in labor productivity in the second quarter, along with a remarkably small rise in unit labor costs. The data may have eased the concerns of some investors, who interpreted hints of rising wage costs in recent weeks to mean that the Federal Reserve might act sooner than expected to head off any inflationary pressures by raising short-term interest rates.

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    • Factory orders in June climbed a seasonally adjusted 1.1%, the Commerce Department said Tuesday, topping the 0.6% gain forecast in a MarketWatch-compiled economist poll. That's the fourth gain in five months and the level of $503.2 billion is the highest on record. Durable-goods orders rose 1.7%, higher than the initially estimated 0.7% gain.
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    Beef: It is good for Your Heart:
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    Recent research by nutritional scientists shows solid evidence that a dietary pattern rich in fruits, vegetables and low-fat dairy products that includes lean beef–even daily–can reduce risk factors for heart disease such as elevated cholesterol and blood pressure. Beef’s contribution to saturated fatty acids is frequently exaggerated and misunderstood. 

    Results of this new research, funded by the beef check-off and the National Institutes of Health-supported General Clinical Research Center at Penn State show that a heart-healthy diet that includes lean beef can reduce risk factors for heart disease.

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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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    • From August 7 - 11, showery weather will gradually shift from the north-central U.S. into the Southeast. Five-day rainfall totals could reach 2 to 4 inches from the southwestern Corn Belt to the Carolinas. Meanwhile, mostly dry weather will prevail across the Great Lakes region and the southern Plains, although generally cool weather in the Midwest will contrast with hot conditions in the south-central U.S. Farther west, monsoon showers will be mostly confined to the northern Intermountain region, although a new surge of moisture may reach the Southwest during the next few days. In Hawaii, the remnants of Hurricane Iselle will pass over or very close to the Big Island during the night of August 7-8. Iselle, expected to be a tropical storm upon reaching the Big Island, could result in torrential rainfall and gusty winds. Effects from Iselle may also reach some of the other Hawaiian Islands, mainly on August 8.
    • The NWS 6 to 10-day outlook for August 12 - 16 calls for the likelihood of below-normal temperatures from the central Plains into the Midwest and Northeast, while hotter-than-normal conditions can be expected across the northern High Plains, Deep South, and much of the West. Meanwhile, near- to above-normal rainfall across the majority of the U.S. will contrast with the likelihood of drier-than-normal weather in southern Texas and from the Pacific Northwest to the northern High Plains.
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    Cowherd Rebuilding Slow:

    Consumers looking at the price of beef in grocery store meat markets may be wishing more cattle were in the food production system to lower the hit on their wallets, but that is not likely to happen anytime soon.

    “Data from the U.S. Department of Agriculture provides some indication that herd expansion may be beginning but more clearly shows herd rebuilding will be a long process and a slow one, at least initially,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.

    The July Cattle report shows estimates of herd inventories down in most all categories compared to the last report in 2012. Since no 2013 report is available for comparison, it is not readily evident whether inventories are higher or lower than last year for the various categories.

    “It is likely most are lower,” Peel said. “However, it also appears the beef cow herd is stabilizing and is likely only slightly lower than last year.”

    The July 1 estimate of beef replacement heifers was down from July 2012 despite the fact that Jan. 1 estimates of beef replacement heifers increased each of the past three years. The ratio of the July 1 beef replacement heifers to the January inventory of replacement heifers is the lowest since the July estimates began in 1973. This ratio typically rises during herd expansion and decreases during liquidations,

    “This indication of additional herd liquidation is somewhat in contrast to the heifers on feed in the July report, which is down 4.6 percent from year-earlier levels,” Peel said.

    The year-over-year decrease in July 1 heifers on feed is consistent with modest levels of initial herd expansion. Quarterly estimates of heifers on feed have posted year-over-year decreases for the past eight quarters, with an average decrease of 6.8 percent.

    So far this year, heifer slaughter has declined 7.9 percent, a significantly larger decrease than steer slaughter, which declined 2.9 percent for the year to date. Beef cow slaughter is down 16.4 percent so far this year compared to the same period last year.

    “These decreases in female slaughter strongly suggest herd expansion is beginning,” Peel said. “Aggregate herd balance numbers suggest the capacity for herd expansion is greater than what has been observed to date.”

    Analysts have put forth several factors that may be limiting herd expansion in these early stages. Record-high feeder cattle prices that will eventually stimulate herd expansion may, in the short run, increase the temptation to sell heifers rather than retain them for breeding. This is particularly true for producers still recovering financially from drought and other economic difficulties.

    “For some older producers who are considering retirement, current market prices may provide the incentive to sell out and exit the industry,” Peel said. “While new producers will, in most cases, replace the older producers, there may be a lag in herd growth during the transition.”

    Additionally, the record-high prices that cattle sellers currently enjoy also imply high prices for breeding females. This could be a deterrent to expansion, at least initially, for cash-strapped producers.

    Regional factors may be moderating herd expansion as well. Much of the eastern half of the U.S. has lost pasture and hay acreage as crop production has expanded in recent years, leading many analysts to project less herd rebuilding in this region.

    “Drought conditions persist in much of the Great Plains and West regions, where proportionately more herd expansion is likely,” Peel said. “However, herd rebuilding may be moderated for several months to several years to allow recovery of pasture and range.”

    Furthermore, the biology of cattle production implies a strict limit on how fast herd expansion can take place. Herd expansion will start slowly from the current low herd base under the best of circumstances.

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    Feedyard Closeouts: Profit/(Loss)
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    • Typical closeout for steers sold this week & hedged when placed on feed: ($68.58)
    • Typical closeout for un-hedged steers sold this week: $296.99
    • Projected closeout based on the futures & estimated Cost of Gain for steers placed on feed this week: ($127.68)
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    Slaughter Cattle:
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    Friday in the Texas Panhandle trading of available negotiated cash live cattle sold unevenly steady at 160.00 when compared to Thursday the last reportedmarket. In Kansas trading has been limited on light demand. Compared to the last reported market on Thursday live sales sold mostly steady at 160.00. Thus far for Friday in Nebraska trading has been slow to moderate on moderate demand. Compared to the last reported market on Thursday live sales sold steady to 1.00 lower from 158.00 to mostly 160.00. Compared to last week dressed sales sold 5.00 to 6.00 lower from 250.00 to 252.00. In Colorado trading has been slow on light to moderate demand. Compared to last week live sales sold 3.50 lower at 160.50. So far for Fridayin the Western Cornbelt trading has been slow on moderate demand. Compared to last week live sales sold 3.00 to 4.00 lower from 157.00 to 160.00. Dressed sales sold 5.00 to 6.00 lower from 248.00 to 252.00.
     
    Livestock Slaughter under Federal Inspection:
                                             CATTLE     CALVES   HOGS           SHEEP
    Friday 08/08/2014        (est)  114,000      2,000     345,000          6,000
    Week ago (est)                     114,000      2,000     263,000          6,000
    Year ago (act)                      121,000       3,000     379,000         7,000
    Week to date (est)                568,000     10,000   1,894,000       40,000
    Same Period Last Week (est) 565,000     10,000   1,866,000       41,000
    Same Period Last Year (act)   602,000    14,000   2,003,000        44,000

    Saturday 08/09/2014      (est)   5,000         0            25,000         0
    Week ago (est)                        9,000         0              1,000         0
    Year ago (act)                        26,000         0            21,000         0
    Week to date (est)                573,000     10,000    1,919,000       40,000
    Same Period Last Week (est) 574,000     10,000    1,867,000       41,000
    Same Period Last Year* (act) 628,000     15,000    2,025,000       44,000
    2014 Year to Date             18,223,000   365,000  62,918,000   1,290,000
    2013 *Year to Date           19,589,000   450,000  66,108,000   1,281,000
    Percent change                   -7.0%       -18.9%       -4.8%          0.7%

    Negotiated prices paid for Slaughter Steers and Heifers:

    Live basis:              Steers                             Heifers
    Over 80% Choice     157.00-160.50 avg 158.85   158.00-160.50 avg 159.46
    65 - 80% Choice      157.00-160.50 avg 159.33   158.00-160.50 avg 159.81
    35 - 65% Choice      158.50-160.50 avg 160.14   160.00-160.50 avg 160.22
    0 - 35% Choice             -                                        - 
    Total all grades     157.00-160.50 avg 159.28   158.00-160.50 avg 159.76

    Dressed basis
    Over 80% Choice     248.00-255.50 avg 250.59   248.00-252.00 avg 250.44
    65 - 80% Choice      246.00-252.00 avg 249.77   248.00-252.00 avg 250.10
    35 - 65% Choice      251.00-251.00 avg 251.00   251.00-251.00 avg 251.00
    0 - 35% Choice             -                                       - 
    Total all grades     246.00-255.50 avg 249.99   248.00-252.00 avg 250.23

     

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    Corn Crop Condition:
    .
    Drier weather in the Corn Belt may have played a role in the slight decline of the nation’s corn conditions, but this dry streak failed to significantly impact corn conditions. According to the USDA’s Crop Progress report, this week 73 percent of corn is rated in good or excellent condition, 2 percentage points below last week’s report. Even with the drop, looking at historical Crop Progress data, conditions remain the best seen since 2004:

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    National Grain Summary:
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    Corn and wheat closed lower ahead of next week’s USDA report on Tuesday with bearish estimates in mind.  This did not however stop soybeans from closing higher with good export demand.
    • Corn Futures Summary: Favorable weather depressed corn futures Friday. Widespread rainfall fell over the Corn Belt this week and precipitation is expected both next week and the week after. Thus, it looks like the corn crop will finish well, which seems quite bearish. September corn slumped 7.75 cents to $3.5175/bushel late Friday, while December dipped 7.75 to $3.635.
    • Soybean Futures Summary: Tight old-crop supplies supported the soy complex. Talk of strong Chinese bean imports offered fresh support for bean and soymeal prices Friday. Bulls reportedly keyed upon expectations for a low 2013/14 carryout on next Tuesday’s WASDE report. Those considerations offset weather-driven selling in new crop futures. Weak Asian palm prices dragged oil values lower. September soybean futures climbed 14.5 cents to $11.1375/bushel as Friday’s pit session ended, while November futures rose 6.75 cent to $10.8475. September soyoil dropped 0.18 cents to 35.52 cents/pound, whereas September soymeal gained $3.8 to $367.9/ton.
    • Wheat Futures Summary: The wheat markets ended the week poorly. The prospect of good growing weather for the spring wheat crop seemed to weigh upon the golden grain markets Friday. Traders may also have exited positions prior to the weekend, since big USDA crop reports are looming next Tuesday. Concerns about Russian adventurism in Ukraine seemed muted as well. September CBOT wheat fell 12.25 cents to $5.4925/bushel at their Friday close, while September KC wheat dove 17.0 cents to $6.2925/bushel, and September MWE wheat sank 15.75 to $6.1875.
    Corn had weekly export sales totaling 34.6 mb with 4.8 mb for 2013-2014 marketing year.  Soybeans had export sales of of 40.5 mb with 3.5 mb for 2013-2014 marketing year.  Wheat had weekly export sales of 22.8 mb with 21.7 mb for 2014-2015 marketing year. 
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    Five Year Moving Average - Corn & Wheat
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