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SAMPLE... Market Summary for the week ending July 24th:
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The Cattle Range 10 Day Market Trend:
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Bearish: The July Cattle Inventory and Cattle on Feed reports released on Friday confirm a shift has occured from a market driven higher by lower supplies of cattle to a market in which higher prices will be contingent upon increases in domestic demand for beef and beef exports.
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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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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       93,700     29,000        39,900         162,600
Last Week     121,100     72,200       361,600        554,900
Last Year       122,500     39,800        66,900         229,200

Compared to last week, the downtrend continues in the feeder cattle markets as feeder cattle and calves traded unevenly steady to 5.00 lower early in the week turning mostly 7.00-10.00 lower from midweek on.  CME cattle futures this week had a tough day on Tuesday latching on to a lead balloon that continued into Thursday and weighed heavily on the market.  Long liquidation selling and feeder cattle futures looking at sharply lower feeder cattle index pressured prices.  The feeder cattle market is starting to break hard over the last several weeks and keeps buyers and sellers on the defensive and more conscious of bearish fundamentals.

We have seen high prices continued to be paid for feeder’s premium to the fat cattle.  Prices paid for feeder cattle up till now for the most part have been very good for the backgrounder and the cow/calf man.  But break evens are so distant that it’s looking impossible for any results to be positive for the cattle feeder.  Northern Livestock Video out of Billings, MT held a three-day video auction this week selling over 93,000 head of top quality feeder calves and yearlings.  Some of the top prices paid included 585 head of value added (all Natural) yearling steers weighing 950 lbs sold for 230.00 for November delivery.  There was near 3000 head of 900-950 lb steers averaging 910 lbs that sold with a weighted average price of 216.84 for  September delivery.

Boxed-beef values continue to washout with very few upside moves since before the 4th of July, as carcass values still try to carve out a summer low.  Boxed-beef prices have reached their lowest levels since June 2014, as Choice product on Friday closed down 1.89 at 230.70.  The market has been worried about consumer beef demand for a long time with concerns over increasing meat supplies of pork and chicken.  June beef stocks were at 467.136 million lbs which is 1.9 percent lower than last month but 30.4 percent higher than last year.  Boneless beef has seen large increases of imports mainly from Australia showing increases of 210 million lbs compared to last year.  June pork stocks were at 632.209 million lbs down 3.5 percent from last month and 17.6 percent higher than last year.  Retail prices for June saw beef values hit an all-time high with the average price for all beef sold at retail averaging 6.11/lb.  Pork prices have been declining after hitting their all-time highs last summer, the average retail pork prices for June averaged 3.70/lb.

The July 1st Cattle Inventory Report was released on Friday showing ranchers expanding the cattle herd for the first time since 2006.  All cattle and calves came in at 98.4 million head, 2 percent higher than a year ago.  Highlights included beef cows at 30.5 million head, up 3 percent from a year ago; Replacement heifers were at 4.90 million head, up 7 percent; steers over 500 lbs 14.1 million head, up 3 percent.  The 2015 calf crop is expected to be 34.3 million head, up 1 percent from last year.  Cattle on Feed Report was mostly neutral to slightly bearish with Cattle on Feed for July 1st at 102 percent; Placements at 101 percent were larger than expected; Marketings were at 95 percent.  Grain is pretty much now focused on yield potential for this year’s crop.  Crop variations will be widespread as the crop potential for the Western Corn Belt is in much better shape than the potential of the eastern Corn Belt.  Auction volume included 55 percent over 600 lbs and 35 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: Cattle futures remained under pressure Friday. Country cattle traded $2.00-$3.00 lower Thursday evening than they did late last week. That might easily have been construed as a fresh bearish indicator, but cattle futures posted only moderate losses. Traders probably viewed the cash losses as fulfilling bearish expectations, but they probably didn’t want to add to shorts ahead of this afternoon’s USDA reports. August cattle slid 0.32 cents to 143.02 cents/pound in late Friday action, while December futures declined 0.42 to 147.05. Meanwhile, August feeder cattle futures slipped just 0.10 cents to 209.67 cents/pound, whereas November feeders surged 0.95 to 204.97.
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Selected Auction Reports:
"Click" on individual auction links for complete report

Oklahoma National Stockyards - Oklahoma City OK
Actual Receipts: 4,501   Last Monday: 6,546   Year Ago Monday: 4,892
Compared to last week:  Feeder steers and heifers traded weak to 5.00 lower.  Steer and heifer calves mostly 2.00 to 5.00 lower on comparable sales.

El Reno Cattle Narrative - El Reno OK
Receipts:  4977    Last Week:  5770    Year Ago:  3787
Compared to last week: Feeder steers and heifers were mostly steady to 2.00 lower on comparable sales.  Not enough comparable sales on steer or heifer calves for a market trend.

Toppenish, WA Livestock Auction - Toppenish WA
Receipts:  1600    Last Week:  1400    Year Ago:  1525
Compared to last Thursday at the same market, stocker cattle less than 800 lbs. steady to weak. Feeder cattle more than 800 lbs. firm to 3.00 higher. Trade active with good demand. Slaughter cows steady. Slaughter bulls 3.00-4.00 higher.

Joplin Regional Stockyards Feeder Cattle Wtd Avg - Carthage MO
Receipts:  2288    Week Ago:  2771    Year Ago:  3914
Compared to last week, steers and heifers under 600 lbs steady to 5.00 lower, over 600 lbs steady to 5.00 higher.

Cattleman's Livestock Auction - Dalhart, TX
Cattle and Calves: 682           Week ago: 1186          Year Ago:
Compared to week ago:  Not enough feeder steers and heifers on offer for good market test however firm undertone noted on few packages of steer and heifer calves under 550 lbs.  Slaughter cows steady.  Slaughter bulls not well tested.

Pratt Livestock Feeder Cattle Auction - Pratt, KS
Receipts:  2928    Last Week:  1152    Year Ago:  1669
Compared to last week: Feeder Steers 700-850 lbs no comparison, however a lower undertone noted, 850-1000 lbs 7.00-10.00 lower; Feeder Heifers steady to weak in an extremely limited supply. Not enough steer and heifer calves for a market test. Slaughter cows and bulls firm to 2.00 higher.

Valentine Livestock Auction Market - Valentine NE
Cattle Receipts:  2401  Two weeks ago:  3020  Last year: 2584
Compared with two weeks ago, the market had a considerable lowerundertone with 850 to 900 lbs steers trading 13.00 lower, and 850lbs heifers also trading 13.00 lower.

Clovis Livestock Auction - Clovis NM
Receipts:  1075               Week Ago:  1383          Year Ago:  1031
Compared to last week:  Feeder steers under 600 lbs 3.00 lower on limited comparable sales.  No comparison on 600-700 lbs, over 700 lbs 6.00 lower.  Heifers steady to 1.00 lower.  Slaughter cows 1.00-3.00 lower, bulls 1.00 higher though quality more attractive.

Mitchell Livestock Wtd Avg Report - Mitchell SD
Receipts:  2107    Two Weeks Ago:  1947    Year Ago:  3457
Compared to two weeks ago: few comparable sales this week, with besttest of steers 900-950 lbs mostly steady, 950-1000 lbs 10.00 lower in anarrow comparison.  Feeder heifers 750-800 lbs mostly 7.00 to 10.00 lower, 900-950 lbs 5.00 lower.

Direct Sales of Feeder & Stocker Cattle:

AZ-CA-NV Weekly Feeder Cattle Review (Fri)
Confirmed: 580 
Compared to last week, Trade slow, demand light.

Colorado Direct Feeder Cattle Report (Fri)
Receipts:  0     Last Week:  7,584     Last Year:  5,820
Compared to last week:  No trades reported.

Eastern Cornbelt Direct Feeder Cattle Summary (Fri)
Reported sales this week: 0    Last Week: 53    Last year: 0
Compared to last week:  No trend available for feeder steers and heifers due to limited comparable sales.

Georgia Direct Cattle Summary (Fri)
Confirmed sales on 1,022 head.

IA-South MN Direct Feeder Cattle Weekly (Mon)
Receipts:  0    Last Week:  0    Last Year:  0
Compared to last week:  No trend available for feeder steers and heifers due to lack of current FOB cattle this week.

Kansas Direct Feeder Cattle Summary (Fri)
Receipts:  2988    Last Week:  2995    Year Ago:  1273
Compared with last week: Feeder steers steady to 2.00 lower early, very little trade late in the week; not enough heifers for a market test.

Montana Direct Feeder Cattle Wtd Avg (Fri)
Receipts:  3,849     Last Week: 0     Year Ago:  0 
Compared to last week:  No trades reported.

New Mexico Feeder Cattle Report (Mon)
Receipts:  800    Last Week:  540    Year Ago:  4900
Compared to last week:  No trend due to limited comparable sales of feeder steers and heifers.

Northwest Wtd Avg Direct Feeder Cattle Report (Fri)
Receipts:  4500    Last Week:  7850    Year Ago:  3850
Compared to last Friday, feeder cattle steady to 4.00 lower.

Oklahoma Direct Feeder Cattle (Fri)
Receipts: 3,120    Last Week 12,008    Last Year 2,653 
Compared to last week:  Feeder steers traded mostly steady to weak where comparable sales were noted.  No trend available for feeder heifers.

South Dakota Direct Feeder Cattle Summary (Fri)
Receipts: 0    Last Week:  60     Last Year:  220
Compared to last week:  No trades reported.

Texas Direct Feeder Cattle (Fri)
Confirmed:  15,400     Last Week: 20,300     Last Year: 11,500
Compared to last week current FOB feeder steers and heifers were steady to 2.00 higher with instances up to 4.00 higher early in the week regaining most of what was lost last week.  However weakness was noted later in the week as bids began to drop again.

WY, Western NE & Western Dakotas Direct Feeder Cattle Wtd Avg (Fri)
Receipts: 1,593    Week Ago:  15,180    Year Ago:  7,415 
Compared to last week, future delivery steers calves sold steady to weak. No recent comparison on steers over 850 lbs but a lower undertone was noted.

Weekly Auction Summaries:
 

  • Reported on Friday for current week.
  • Reported on Monday for previous week.
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    Representative Sales of Cow & Pairs:
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    • Joplin, MO
      • Bred Cows:  Medium and Large 1-2  2-6 yrs 2nd and 3rd stage 1100-1295 lbs 1800.00-2350.00, several pkgs. fancy heifers 2nd and 3rd stage 975-1000 lbs 2675.00-2700.00; broken mouth to aged 2nd and 3rd stage 1125-1325 lbs 1300.00-1650.00. Large 1-2  5-6 yrs 2nd and 3rd stage 1400-1525 lbs 1900.00-2375.00, pkg. heifers 3 yrs 3rd stage 1365 lbs 2700.00.  Medium 1-2  4-5 yrs 2nd and 3rd stage couple 800-1000 lbs 1425.00-1575.00.
    • West Plains, MO
      • Bred Cows:  Medium and Large 1-2  3-7 yrs 1025-1475 lbs 2nd-3rd stage 2000.00-2300.00, 1st stage 1900.00-1950.00, pkg 2 yrs 1310 lb heifers in 3rd stage 3000.00; Short-solid mouth 1120-1550 lb cows in 2nd-3rd stage 1850.00-2150.00.  Medium and Large 2  2-7 yrs 965-1215 lbs 2nd-3rd stage 1700.00-1950.00, 1st stage 1500.00-1750.00; Short-solid to broken mouth 972-1295 lbs 2nd-3rd stage 1475.00-1750.00. 
      • Pairs:  Medium and Large 1-2  3-7 yrs 930-1045 lbs w/225-300 lb calves 2300.00-2750.00; Short-solid to broken mouth 1010-1035 lbs w/200-300 lb calves 1800.00-2000.00.  Medium and Large 2  2-7 yrs 780-1005 lbs w/100-250 lb calves 1700.00-2050.00; Broken mouth 810-930 lbs w/100-300 lb calves 1250.00-1550.00. 
    • Springfield, MO
      • Bred Cows:  Medium and Large 1-2  2yrs to short solid 1075-1225 lbs 2nd-3rd stage 1080-1220 lbs 1800.00-2125.00, 1st stage 1200-1270 lbs 1575.00-1750.00; short solid mouth to aged 2nd and 3rd stage 1045-1115 lbs 1575.00-1825.00.  Large 1-2  2-6 yrs 2nd and 3rd stage 1360-1860 lbs 1950.00-2225.00; short solid mouth to aged 2nd and 3rd stage 1380-1385 lbs 1675.00-1900.00. 
      • Pairs:  Medium and Large 1-2  2-4 yrs 990-1045 lbs w/225-270 lb calves 2475.00-2525.00; pkg. 6 yrs to short and solid mouth 1125 lbs w/350-400 lb calves and rebred 3025.00. 
    • Woodward, OK
      • Bred Cows:  Medium and Large 1-2  2-5 yrs 1150-1450 lbs 2-7 months 2375.00-2700.00.  Medium and Large 2  2-8 yrs 1125-1150 lbs 2-7 months 1700.00-2175.00. 
      • Pairs:  Medium and Large 1-2  2-7 yrs 900-1250 lbs w/125-400 lb calves 2400.00-3125.00.  Medium and Large 2  2-4 yrs 750-1050 lbs w/100-150 lb calves 1650.0-2175.00.
    • El Reno, OK
      • Bred Cows:  Medium and Large 1-2  2-7 yrs 1000-1300 lbs 2-8 months 2175.00-2600.00.  Medium and large 2  2-10 yrs 900-1400 lbs 2-8 months 1650.00-2050.00.
    • Clovis, NM
      • Bred Cows:  Medium and Large 1-2 Young 950-1375 lbs 3-8 months 1425.00-2250.00; middle aged 900-1395 lbs 3-8 months 1300.00-1785.00; young to middle aged cows 970-1395 lbs 1-3 months 1250.00-1675.00; aged 1030-1405 lb cows 3-8 months bred 1450.00-1710.00. 
      • Pairs:  Medium and Large 1-2 Young 1300-1350 lbs w/125-175 lb calves 2100.00-2625.00; middle aged pkg 1500 lbs w/250-300 lb calves 2600.00; aged 1325-1435 lbs w/250-300 lb calves 2500.00-2600.00.
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    Bred Cows & Heifers in 2nd & 3rd Stages of Pregnancy:
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    Insufficient sale data available this week to calculate viable averages.
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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. Dressed sales have been reported from 306.00-307.00 delivered which is 2.00-3.00 lower than reported sales last week. All reported cash sales have been purchased by local buyers. US packer inquiries were noted this week but bids were short of getting cattle bought. Depending on freight on and dressing percent US bids were working back in the upper 170's to low 180's. Tentatively cash to futures basis levels did strengthen this week.
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    Canadian Weekly Cattle Report
     

    Fed cattle weaker

    • The western Canadian fed sales volume was too light last week to establish a reliable market trend.
    • However, the weekly steer price was around $4.25 per hundredweight lower than the previous week, which put prices in the mid-$180s and heifer prices around $2.50 lower.
    • Packers are well bought through July and are struggling with negative operating margins.
    • Chicago live cattle futures fell, and cash cattle in the U.S. Plains sold at US$148 per cwt., $2 to $3 lower than the previous week.
    • A few dressed sales were reported in Alberta midweek at C$308 to $310 per cwt. delivered, down $5 to $6 from the previous week.
    • The weekly cash-to-futures basis is close to the normal July average of -$6.88.
    • Weekly western Canadian fed slaughter to July 11 rose four percent to 33,523 head. Weekly fed exports for the short week ending July 4 rose 69 percent to 3,409 head.
    • Signals from the U.S. market are lower and Canadian packers have good supply, but a more normal Alberta-Nebraska cash basis and a weaker Canadian dollar means there should be new buying interest from American packers.
    Cows steady
    • D1, D2 cows were steady, but prices traded at a $4 discount to U.S. utility cow prices.
    • D1, D2 cows ranged $130-$145 to average $135.90 per cwt., and D3 cows ranged $115-$130 to average $124.75. Slaughter bulls averaged $170.18, up more than $3.
    • Bulls are trading $45 higher than the same time last year, while cows are $20-$22 stronger.
    • The spread between butcher bulls and D1, D2 prices is wide at $30.
    • A few cow-calf pairs with older calves at side are being split at auction.
    Feeders steady
    • Steers weighing 800-900 pounds traded steady and were only $2.50 short of highs set in June.
    • The forward delivery market was lightly tested with a good mix of yearlings and calves on offer.
    • Yearling prices for August and September delivery were steady, but the basis appeared weaker.
    • Adjusted 850 basis levels f.o.b. on most August delivery steers were -$20 to -$22, weaker than the five year 2010-14 average of -$12.65.
    • Eastern Canadians were active buyers of western Canadian calves, showing particular interest in heavier steers.
    • Alberta and Saskatchewan 700-750 lb. steers for October delivery were priced $279-$298 per cwt., while load lot groups of British Columbia, Alberta and Saskatchewan calves 550-660 lb. for the same delivery window traded from $310.50-$327.75.
    • They were top-end, one-owner cattle, making it difficult to make an apples-to-apples comparison.
    • Steer calf prices for October delivery are $30-$40 higher than October 2014.
    Beef falls
    • U.S. boxed beef prices fell with Choice down $5.77 per cwt. and Select down $5.76.
    • Prices are now $13-$16 below year-ago levels and $1-$4 below the spring lows set in February.
    • Canadian boxed beef prices for the weeks ending July 4 and 11 were unavailable.
    This cattle market information is from the weekly report from CanFax, a division of the Canadian Cattlemen’s Association.
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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 $0.7730 U.S. dollars
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    Prices for the week ending July 17th:
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    July 24th: July Cattle on Feed Report

    United States Cattle on Feed Up 2 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 10.2 million head on July 1, 2015. The inventory was 2 percent above July 1, 2014. The inventory included 6.91 million steers and steer calves, up 7 percent from the previous year. This group accounted for 67 percent of the total inventory. Heifers and heifer calves accounted for 3.33 million head, down 7 percent from 2014. July 1, 2015 heifers and heifer calves inventory is the lowest percent of total July inventory since the series began in 1996.
    • Placements in feedlots during June totaled 1.48 million, 1 percent above 2014. Net placements were 1.41 million head.During June, placements of cattle and calves weighing less than 600 pounds were 350,000, 600-699 pounds were 250,000, 700-799 pounds were 336,000, and 800 pounds and greater were 545,000.
    • Marketings of fed cattle during June totaled 1.75 million, 5 percent below 2014. Marketings are the lowest for June since the series began in 1996.
    • Other disappearance totaled 69,000 during June, 8 percent below 2014.

    Cattle on Feed Inventory in 1,000+ Capacity Feedlots as of July 1st
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    Number of Cattle Placed on Feed in 1,000+ Capacity Feedlots in June
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    Number of Cattle Marketed from 1,000+ Capacity Feedlots in June
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    Cattle on Feed by State as of July 1st
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    July 1 Cattle Inventory Up 2 Percent:
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    • All cattle and calves in the United States as of July 1, 2015, totaled 98.4 million head, 2 percent above the 96.3 million on July 1, 2014. The last time all cattle and calves inventory for July 1 increased was 2006.
      • All cows and heifers that have calved, at 39.8 million, were up 2 percent from July 1, 2014.
      • Beef cows, at 30.5 million, were up 3 percent from July 1, 2014.Milk cows, at 9.30 million, were up 1 percent from July 1, 2014.
    • Other class estimates on July 1, 2015 and the percent change from July 1, 2014, are as follows:
      • All heifers 500 pounds and over, 15.9 million, up 2 percent.
      • Beef replacement heifers, 4.90 million, up 7 percent.
      • Milk replacement heifers, 4.20 million, up 2 percent.
      • Other heifers, 6.80 million, down 1 percent.
      • Steers, weighing 500 pounds and over, 14.1 million, up 3 percent.
      • Bulls, weighing 500 pounds and over, 1.90 million, unchanged.
      • Calves under 500 pounds, 26.7 million, up 2 percent.
    • The 2015 calf crop is expected to be 34.3 million, up 1 percent from 2014. Calves born during the first half of the year are estimated at 24.8 million, up 1 percent from the previous year. 
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    * As a percentage of Top Sirloin Steak

    Prices from a Wal-Mart Super Center -- Wal-Mart is the world's largest retailer with over one-half of sales coming from groceries.

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    Photo of the Week:
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  • 90 Angus 2nd-Calf Cows... S. Central Saskatchewan*
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    Shootin' the Bull Weekly Analysis:
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    In my opinion, the two reports combined are negative.  With so much price already having been taken off in anticipation of this, I'm not sure how negative just yet.  What I do know is that expansion is running at full steam and there is not much that will derail that in the near future.  Potentially, since the numbers did not come out overly negative, one may want to anticipate a sell the rumor/buy the fact mentality come Monday morning. 

    I perceive that whatever transpires on Monday and Tuesday of next week, the choke holds that sectors are applying won't be lifted anytime soon and until the consumer sees a price break at the retail level, their level of consumption will remain comparable to the price of beef. This week has been important to the industry, providing it with significant information to digest.  The cold storage report shows that even with significant reduction in production, the freezers continue to fill.  The on feed report shows more inventory than this time last year and fewer marketing's.  Lastly, the inventory report helped to confirm the expansion the industry is attempting. 

    All of these reports appear to suggest an increase in supply.  Albeit slow, an increase nonetheless.  Then there is demand.  In the sectors, the choke holds produced by retailers and the packers are punishing the consumer and feed yards.  Grocers and restaurants are not passing along newly acquired margins from boxes having sold off because they've not had any margins for quite some time now.  Packers are not anticipated to increase kills because the increase in inventory is not enough, or readily sustainable, to justify increasing the kill.  This continues to make less beef available to grocers and restaurants in an attempt to keep prices higher and more cattle on feed as the reduced kill backs cattle up in the feed yards. 

    Now, we have fall just right around the corner and are anticipated to see significant numbers of feeder cattle marketed that could swell feed yards further.  So, all in all, we are perceived in the position of, what was once anticipated is now coming to fruition.  My analysis suggests there is still further price declines in feeder cattle to be anticipated.  However, it may take a week or two to haggle out this weeks decline and information gathered.

    Both fats and feeders made new lows from high of the year this week.  Technical indicators all turned due south.  Downside objective for fats were met this week at the April low per respective contract month.  This does not suggest I want to be a buyer though.  Due to the still exceptionally high price of feeders, I anticipate further declines in them.  Feeder cattle remain the highest priced commodity on the board in relation to historical high.  The stalwart markets of energy and money continue to push lower due to less demand and over supply.  As these markets are necessities to life, it's hard to fathom that feeder cattle should remain at such elevated levels.  The economy is perceived in a full fledged deflationary environment.  If you would like information on this, take a moment to view the webinar from last week on my website. 

    Corn traders buffaloed me both ways the past several weeks.  After becoming dismayed with the length of time at the bottom, I missed the rally.  Then, I anticipated a higher target and made no sales towards the high.  For the time being, I remain friendly towards corn, but am fully aware of the deflationary factors working on traders mentalities. 

    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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    Margin between the Choice Boxed Beef Cutout & Feeder Steers:
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    5 Year Average: $42.60 -- This Week: $16.00

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    Summer Meat Demand:
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    Meat prices are higher in the latest retail prices released for the month of June.  The All Fresh retail beef price was $6.114/lb., up $0.059 cents from May and up $0.606/lb. from one year ago.  The June retail pork price was $3.703/lb., up $0.007/lb. from last month but $0.413/lb. lower than June of 2014.  The retail broiler composite price was $1.987/lb., $0.055/lb. higher than May and up $0.038/lb. year over year.

    Pork and broiler retail prices increased in June despite continued increases in supplies for both meats.  High beef prices may be providing more evident support for the other meats. However, retail beef prices remain record high relative to pork and broiler prices.  In June, retail beef prices were 3.1 times retail broiler prices, continuing a ratio above 3.0 that first occurred in December 2014.  Both retail beef and broiler prices climbed about 6 cents per lb. from May to June.  Wholesale poultry breast meat and leg prices have continued to decline through June and into July, while wing prices have be mostly steady since May.  Weak broiler exports, down 8.6 percent for the year to date, due to the strong dollar, avian influenza and the Russian poultry ban, are contributing to soft broiler wholesale values.

    Retail beef prices were a record 1.65 times higher than retail pork prices in June, with retail beef prices up about 6 cents/lb. and retail pork price up less than a penny from May.  Lower pork prices, in the face of sharply increased pork supplies, appear to be stabilizing with pork demand responding to lower pork prices.  Wholesale pork loin prices recovered some from mid-June lows into July while ham values eroded through June and into to July.  Wholesale pork belly prices have increased steadily for several weeks, climbing over 90 percent from late February lows.  Wholesale pork spare rib prices have been above year ago levels since late April, likely driven by strong export demand.  Overall pork exports are down, particularly to China, but remain strong to South Korea, where spare ribs are a popular item.

    Demand pressures are building, at least seasonally, in the beef market.  Though June retail All Fresh prices were higher, Choice retail beef prices were $640.6/ lb., down slightly from $6.412/lb. in May but still $0.489/lb. higher compared to June, 2014.  The wholesale Choice-Select spread has narrowed from a peak in May through June and into July.  The spread is following a pattern similar to last year and is more or less seasonal but somewhat exaggerated with Choice values falling sharply relative to Select values.  This partly reflects supply conditions with relatively abundant Choice beef supplies due to high Choice grading percentages and also likely reflects relatively stronger Select demand compared to the more expensive Choice beef. 

    Beef demand is caught in the summer doldrums with lots of high temperatures curtailing grilling and abundant pork and poultry supplies catching most of the retail featuring attention. Wholesale ribeye prices have dropped below last year after tracking well above year ago levels for much of the year.   Other middle meats, e.g. loin strips, have dropped sharply off seasonal peaks in May and have fallen below year ago levels. Wholesale values for chucks and rounds are generally holding above year ago levels.  Wholesale values for lean processing beef are holding steady but the price of 50 percent trim has eroded sharply since April reflecting both weaker ground beef demand and abundant trim supplies due to heavy carcass weights and increased fat trim on steer and heifer carcasses. The ability of beef to continue holding record price levels relative to pork and poultry will depend, not only on prices of those competing meats, but also continued growth in the U.S. economy, consumer income impacts of things like gasoline prices and the strength of foreign demand for U.S. beef. 

    Derrell S. Peel -- Oklahoma State University Extension

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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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    Replacement Market:
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    Stocker cattle operators are getting a taste of what beef processors and cattle feeders have been experiencing over the past year. The margins just aren't there. When you take the incoming cattle cost and make assumptions on production costs, add in some death loss and interest, the result is a number well over the futures price for the marketing month -- and that is if everything goes according to plan.

    This phenomena is the result of the final stages of the beef cattle herd build up that is in full swing. Cattle operations at all stages of the production pipeline are facing short supplies now with the promise of more plentiful numbers down the road lending the current environment to high prices for current purchases and discounted prices in the future with operating cost remaining either flat or higher in the interim.

    Mother nature has contributed to this situation. Pasture condition across the plains are excellent and only the far west is suffering sub-normal pasture conditions. The superior pasture has caused all operations to delay marketing plans and put extra weight on the existing inventory. This has further reduced an already short supply of stocker and feeder offerings for current delivery and is reflected in lower placement numbers every month this year.

    Smaller placement numbers when compared to prior year is about to change. Beginning in the second half of this year and continuing next year, supplies of replacement cattle will move from smaller supplies to larger supplies and some of the percentage increases may be large. This will be especially true this fall when yearlings normally marketed in mid summer combined with normal fall marketings will hit the market.

    The risks for stocker operations is increasing. Weather risks, health risk, interest rate risk, and market risk all add up to a risk/reward analysis that may not be worth pursuing for some. Others already have the pasture and need the cattle. Stocker operators will find some risk shifting during the next couple of years as the push will be to lower calf prices and as more calves come to market that will happen. 

    Ag Center Cattle Report

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    Slaughter Cows & Bulls:
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    Slaughter cows mostly 1.00-3.00 lower, with exception of lean cows trading steady to 2.00 higher. 

    Slaughter bulls mostly steady. USDA's Cutter cow carcass cut-out value Friday afternoon was 227.93 -- Down 0.09 from last Friday.

                      %Lean     Weight     Montana     Oklahoma           Alabama 
    Breakers  75-80%   1100-1600     -----       111.00-117.00   107.00-113.00
    Boners      80-85%   1000-1450     -----      111.00-117.00   109.00-114.00
    Lean         85-90%   1000-1300     -----       108.00-115.00   103.00-108.00 
    Bulls          88-92%   1300-2500     -----      136.00-143.00    130.00-135.00

                           Confirmed    Week Ago   Year Ago   Week to Date   Week Ago    Year Ago
    NATIONAL        5,511           7,075           6,832           30,593             32,901         29,063
    S CENTRAL     1,411           1,798           1,428             8,211               8,924            6,395
    N CENTRAL        599               953             334              2,913               3,579            1,679
    EAST                1,667            1,582          2,473              7,887               8,176            9,749
    WEST                  887            1,498          1,353              6,501               6,426             6,044
    MIDWEST           947            1,244          1,244              5,081               5,796             5,196

     

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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 July 21, were mixed. 
    • Soybean Meal was mixed, 1.00 lower to 17.30 higher, mostly 1.70 to 2.70 higher.  Cottonseed Meal was steady to 10.00 higher. Canola Meal was mixed, 3.30 lower to 2.70 higher.  Linseed Meal was 5.00 to 20.00 higher.Sunflower Meal was steady. 
    • Whole Cottonseed was steady to 10.00 lower.
    • Crude Soybean Oil was 22 to 97 points lower.  Crude Corn Oil was 125 points higher. 
    • Ruminant Meat and Bone Meal was mixed, from 4.00 lower to 36.00 higher, mostly steady to 30.00 higher.  Ruminant Blood Meal was steady.  Feather Meal was steady to 45.00 higher, mostly steady.  Menhaden Fishmeal was 10.00 to 50.00 higher. 
    • Corn Hominy was mixed, 5.00 lower to 10.00 higher, mostly steady to higher.  Gluten Feed was steady to 13.00 higher.  Corn Gluten Meal was mixed 10.00 lower to 25.00 higher, mostly steady to 5.00 higher. 
    • Distillers Dried Grain were mixed 22.00 lower to 25.00 higher, mostly 5.00 to 8.00 higher. 
    • Wheat middlings were steady to 20.00 higher.  Wheat millrun was steady to 6.00 lower.

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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, July 25, 2015 was estimated at 890.2 million lbs.according to the U.S.Department of Agriculture's Marketing Service.  This was 0.8 percent higher than a week ago and 3.3 percent higher  than a year ago.  Cumulative meat production for the year to date was  0.9 percent higher compared to the previous year.
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    Bullish/Bearish Consensus:
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    The theory behind the "Bullish/Bearish Consensus" indicator is when the public reaches a consensus, they are usually wrong:
    • They get too bullish after prices have risen, and too bearish after they have already fallen.
    Because of this tendency, there are often extremes in opinion right before major changes in trend:
    • When the public reaches a bullish extreme, i.e., a great majority thinks prices will keep rising, then prices often decline instead. 
    • And when they become too bearish, then prices tend to rise.
    So when Public Opinion moves above the red dotted line in the chart, it means that compared to other readings over the past year, you're seeing excessive optimism.  You also want to look at the absolute level of Opinion, too - if it's at 90%, then there's no question we're seeing an historic level of bullish opinion.  Watch for readings above 80% (or especially 90%) to spot those dangerous times when the public is overly enthusiastic about a commodity.

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

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    Bullish/Bearish Consensus - Cattle
    Last Updated: July 21st
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    Bullish/Bearish Consensus - Corn
    Last Updated: July 21st
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    Economic News:
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    Stocks fall on disappointing earnings: Stocks declined for the week as disappointing earnings from some large and heavily weighted companies dragged down the benchmarks. A steep drop in oil prices also tripped up energy stocks. The narrowly focused Dow Jones Industrial Average underperformed the broader Standard & Poor's 500 Index and fell back into negative territory for the year to date. The small-cap Russell 2000 Index also lagged.  Technology giants Apple and Microsoft reported disappointments after the close of trading on Tuesday, with the latter announcing its biggest quarterly operating loss ever. A drop in commodities prices also took a toll on some industrials firms, which continue to wrestle with the strong U.S. dollar. A report of a contraction in Chinese manufacturing activity on Friday deepened worries about commodity demand and appeared to further a steep slide in stocks to end the week.

    Crude prices drop to spring levels: A drop in oil prices to their lowest levels since early spring weighed particularly heavily on oil stocks. Crude oil inventories in the U.S. rose more than predicted in the previous week, and the nuclear deal finalized with Iran led to expectations for millions more barrels to enter the global market as sanctions on Iranian oil exports are lifted.

    Structural decline in oil production costs:  Analysts note that most of the factors that contributed to the steep fall in oil prices since the latter half of 2014 remain in place: tepid global economic growth, a strong U.S. dollar, growing North American shale oil production, and OPEC's desire to maintain market share in the face of rising non-OPEC production. Moreover, they believe that these factors will ultimately prove to be structural rather than cyclical, resulting in a long-term drop in the marginal cost of producing oil, and thus global prices.

    But energy profits may not have fallen as much as much as expected in second quarter: Even as their longer-term prospects appeared to darken, the short-term profit picture for energy stocks appeared to brighten a bit. Data and analytics firm FactSet reported at the end of the week that second-quarter energy profits were falling somewhat less than had been expected, helping bring the overall estimated annual decline in S&P 500 profits down to 2.2% -- less than half the drop that analysts had anticipated at the start of earnings season. Nevertheless, FactSet estimates that energy sector profits are still on track to fall 54% from the same quarter last year.

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    "Click Here" to view a Slide Show of Drought Monitor maps for the last 12 weeks
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    Looking Ahead:
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    • The NWS WPC 7-Day Quantitative Precipitation Forecast (QPF) calls for generally dry conditions across most of the western U.S. with the exception of some modest accumulation (one-to-two inches) in northern portions of the Great Basin, northern Rockies, and North Cascades. In contrast, the central and northern Plains and western portions of the Midwest are forecasted to receive one-to-three inches while heavy precipitation is forecasted in southern Georgia and Florida with totals in the three-to-seven inch range. 
    • The CPC 6–10 day outlooks call for a high probability of above-normal temperatures east of the Rockies as well as along the West Coast while most of the interior West will be below normal. Across the West (with the exception of extreme southeastern Arizona and southwestern New Mexico), there’s a high probability of below-normal precipitation while the central and northern Plains, western portions of the Midwest, Northeast, and Southeast have a high probability of above-average precipitation.
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    USDA June Cold Storage Report
    • Total red meat supplies in freezers were down 3 percent from the previous month but up 23 percent from last year. 
      • Total pounds of beef in freezers were down 2 percent from the previous month but up 30 percent from last year. 
      • Frozen pork supplies were down 3 percent from the previous month but up 18 percent from last year.
      • Stocks of pork bellies were down 31 percent from last month and down 47 percent from last year.
    • Total frozen poultry supplies on June 30,  were up 1 percent from the previous month and up 13 percent from a year ago.
      • Total stocks of chicken were down 2 percent from the previous month but up 22 percent from last year. 
      • Total pounds of turkey in freezers were up 4 percent from last month but down 1 percent from June 30, 2014.
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    Feedyard Closeouts: Profit/(Loss)
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    • Typical closeout for steers sold this week & hedged when placed on feed: ($145.04)
    • Typical closeout for un-hedged steers sold this week: ($150.35)
    • Projected closeout based on the futures & estimated Cost of Gain for steers placed on feed this week: ($167.42)
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    Slaughter Cattle:
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    Friday trading in the Northern Plains and the Western Cornbelt has beenlimited on light to moderate demand. In Nebraska a few live sales sold at 145.00. In Colorado a few live sales sold at 146.50. In the Western Cornbelt a few live and dressed sales sold at 145.00 and 133.00, respectively. In the Southern Plainsthus for for Friday trading has been at a standstill. Not enough sales for a fullmarket trend in any feeding region. The last fully reported market in Kansas was onThursday with live sales at 145.00. On Thursday In Nebraska dressed sales sold at 232.00. A few lives sold in the Texas Panhandle on Thursday from 145.00-147.00. Afew live sales in Colorado sold at 146.00 on Thursday.Last week in the Western Cornbelt live sales sold at 148.00 and dressed sales sold at 234.00.

    Livestock Slaughter under Federal Inspection:
                                     CATTLE   CALVES     HOGS            SHEEP
    Friday      (est)            96,000       1,000        409,000            5,000
    Week ago (est)        102,000       1,000        375,000            5,000
    Year ago (act)          107,000       2,000        304,000            7,000
    Week to date (est)   532,000       8,000     2,054,000         36,000
    Last Week (est)       535,000       8,000     2,050,000         37,000
    Last Year (act)         564,000     10,000     1,862,000         44,000

    Saturday     (est)          7,000          0                 53,000           0
    Week ago (est)            3,000          0                 32,000           0
    Year ago (act)              6,000          0                   1,000            0
    Week to date (est)  539,000        8,000      2,107,000         36,000
    Last Week (est)      538,000        8,000     2,082,000          37,000
    Last Year* (act)       572,000      11,000      1,863,000         44,000
    2015 YTD           15,898,000    244,000   63,467,000    1,124,000
    2014 *YTD         17,076,000    345,000    59,132,000   1,208,000
    Percent change      -6.9%         -29.2%       7.3%              -7.0%

    Negotiated prices paid for Slaughter Steers and Heifers:
    Live basis               Steers                                     Heifers
    Over 80% Choice   144.00-147.00 avg 144.98   145.00-146.50 avg 146.03
    65 - 80% Choice    145.00-145.00 avg 145.00   145.00-145.00 avg 145.00
    35 - 65% Choice    145.00-146.50 avg 146.13         -
    0 - 35% Choice             -                                               -
    Total all grades    144.00-147.00 avg 145.24   145.00-146.50 avg 145.35

    Dressed basis
    Over 80% Choice   230.00-233.00 avg 231.47   231.00-231.00 avg 231.00
    65 - 80% Choice    230.00-233.00 avg 232.01   230.00-233.00 avg 232.83
    35 - 65% Choice            -                                        231.00-232.00 avg 231.34
    0 - 35% Choice             -                                              -
    Total all grades    230.00-233.00 avg 231.76   230.00-233.00 avg 232.39

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    National Grain Summary:
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    All grains were lower on the week.  Corn traders are looking at weather forecast that shows improvement for the eastern Corn Belt.  Soybeans meal remains a positive for soybeans with good demand.  Wheat prices continue to slide downhill on harvest pressure.  Corn crop conditions remain at 69 percent rated good to excellent with 9 percent rated poor to very poor compared to 8 percent last week.  Uneasiness remains in the grains as areas that have rained soaked crops offer very little hope for producing an average yield which should bear watching for corn prices going forward. The old saying “rain makes grain” is true more often than not, it will likely discount the negative impact on too much rain in key areas.  The debate going forward: Will strong yields in key areas offset low yields in other areas?  No doubt the debate will start over grain numbers; how widely varying crop conditions have developed throughout many important production areas.  Wheat was mostly 29-51 cents lower.  Corn traded mixed, mostly 16-26 cents lower with sorghum trading 44-46 cents lower.  Soybeans closed mostly 1-4 cents lower.

    Corn Futures Summary: The latest weather forecasts seemed to keep downward pressure upon the crop markets. Traders would have been forgiven for taking profits on short positions today, especially after the USDA announced several sizeable export deals through its daily sales reporting system. The fact that the major crop markets suffered another big round of losses probably reflected predictions for very favorable short-term weather conditions, as well as another rise by the U.S. dollar. September corn futures fell 10.75 cents to $3.925/bushel at Friday’s CBOT settlement, while December lost 10.75 to $4.1275.

    Soybean Futures Summary: Soybeans apparently led the crop markets lower Friday. The soy complex was favored by early news of a 220,000-tonne sale of soybeans to China this morning, but that seemed to do very little to stem the bearish tide. Soymeal held up relatively well, but soyoil proved even weaker than did the crude and palm oil markets in week-ending action. As with the other crop markets, current U.S. weather conditions seem very conducive to large autumn yields, thereby seeming to spur across-the-board selling. August soybeans ended Friday having plunged 18.75 cents to $9.9175/bushel, while August soyoil dove 0.71 cents to 30.48 cents/pound and August meal dipped $4.2 to $354.8/ton.

    Wheat Futures Summary: Wheat futures continued their breakdown as well Friday, with the nearby September Chicago contract seeming destined to test the $5.00/bushel level in the short term. As with corn and soybeans, favorable weather forecasts and U.S. dollar strength appeared to overwhelm support related to morning news of a big golden grain sale to Taiwan. September CBOT wheat futures closed 9.75 cents lower at $5.1175/bushel Friday, while Sep KC wheat sank 9.75 cents to $5.0725/bushel, and September MWE stumbled 7.75 cents close at $5.45.

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    Five Year Moving Average - Corn & Wheat
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