Daily Market Highlights

Cash fed cattle trade wobbled from the blocks Wednesday, with hints of slightly lower prices in the South and steady to higher prices in the North.

For instance, there were four lots (475 head) offered for 1-9 day delivery in the weekly Fed Cattle Exchange auction. One lot (133 Kansas heifers) sold for a weighted average price of $111/cwt. Country trade there last week was at $112.

By late afternoon, USDA’s Agricultural Marketing Service also reported early negotiated cash fed cattle sales at $111 in the Southern Plains, but too few transactions to trend.

Conversely, at the fat auction in Tama, IA, Choice steers and heifers traded $1.50-$1.75 higher. For instance, 209 Ch 2-4 steers weighing an average of 1,324 lbs. at $119.03.

Likewise, slaughter steers sold $2-$3 higher at Sioux Falls Regional in South Dakota; $1 higher for heifers.

AMS reported cash trades in the western Corn Belt at $185 on a dressed basis, which was steady to $3 higher than last week. Buyers paid $185 in Nebraska, which was $2 more than the bulk of the previous week’s trade.

Another day of limit-down pressure in Lean Hog futures cast a pall over Cattle futures Wednesday, likely helped along by month-end position squaring. At least part of the pressure on Lean Hogs stems from the lack of progress in trade talks with China.

Live Cattle futures closed an average of $1.02 lower (65¢ lower to $1.42 lower).

Feeder Cattle futures closed an average of $1.25 lower.

Wholesale beef values were weak to lower on moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 49¢ lower Wednesday afternoon at $213.54/cwt. Select was $1.44 lower at $189.69.

Favorable weather and the aforementioned sluggish trade talk between the U.S. and China helped pressure Grain futures Wednesday.

Corn futures closed 9¢ to 11¢ lower through Jul ’20 and then mostly 3¢ to 4¢ lower.

Soybean futures closed 10¢ to 15¢ lower through Sep ’20 and then mostly 8¢ to 9¢ lower.

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Major U.S. financial indices closed sharply lower Wednesday, following a mostly flat session ahead of the announcement from the Federal Open Market Committee (FOMC), regarding interest rates.

As expected, the FOMC reduced interest rates (25 basis points).

“In light of the implications of global developments for the economic outlook, as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 2.0 to 2.25%,” according to an FOMC statement. “This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2% objective are the most likely outcomes, but uncertainties about this outlook remain. As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective.”

Apparently, it was a news conference following the announcement, and interpretation that this may be the only cut, that sent investors fleeing.

The Dow Jones Industrial Average closed 333 points lower. The S&P 500 closed 32 points lower. The NASDAQ was down 98 points.

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“We have to remember that only 4% of the world’s consumers live in this country,” says Randy Blach, CattleFax CEO. “Currently 14% of beef and beef by products are exported. More than 20% of the value of every fed steer is generated by exports. We need to have more outlets for not only our beef, but our poultry and pork.”

Through January of this year, U.S. beef exports equated to an average of $309.33 per head of fed slaughter, according to data released by USDA and compiled by the U.S. Meat Export Federation.

Blach was sharing insights at the Cattle Industry Summer Business Meeting near Denver on Tuesday. With record meat consumption expected next year, he emphasized the importance of opening export markets and resolving trade issues.

Here and abroad, Blach explains increased beef quality expands opportunity. Today, upwards of 80% of the U.S. fed beef supply grades Prime and Choice each week. Production of beef achieving those grades increased 50% during the last 15 years. Along the way, he says beef captured an additional 7% of market share of meat spending from poultry and pork.

By way of reference, the combined percentage of carcasses grading Prime and Choice each week so far this year ranges from 77.11% (week ending June 28) to 83.20% (week ending Mar. 29), according to USDA’s National Steer and Heifer Estimated Grading Percent Report.

More specifically, the percentage of carcasses grading Prime ranges from 6.87% (July 19) to 10.10% (Mar. 22). Carcasses grading Choice ranged from 69.59% (May 24) to 73.88% (Feb. 8). The range for carcasses grading in the upper two-thirds of Choice is 30.14% (May 31) to 35.46% (Mar. 22).

“It’s a great, great success story,” Blach says. “We have to continue to be the highest quality protein provider, delivering products we can stand behind that consumers love.”

Follow-through pressure on Lean Hog futures pressured Live Cattle futures once again on Tuesday. Other than 35¢ higher at the back, Live Cattle futures closed an average of 31¢ lower.

Conversely, lower grain futures boosted Feeder Cattle. Feeder Cattle futures closed an average of 88¢ higher, across a range of 52¢ to $1.30 higher.

Wholesale beef values were higher on Tuesday, with good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 77¢ higher Tuesday afternoon at $214.03/cwt. Select was $1.37 higher at $191.13.

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Despite crop development lagging significantly behind the average, Corn futures closed mostly 5¢ to 6¢ lower through Jul ’20 and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 7¢ lower through Mar ’20 and then mostly 2¢ to 4¢ lower.

According to the most recent Crop Progress report, for the week ending July 28, only 58% of corn was silking, which was 42% less than last year and 25% less than average. 13% was at the dough stage, compared to 35% last year and 23% for average. 58% was in Good or Excellent condition, which was 14% less than last year.

Similarly, 57% of soybeans were blooming, which was 28% less than the previous year and 22% less than average. 21% were setting pods, which was 37% less than last year and 24% less than a year earlier. 54% were rated in Good or Excellent condition, compared to 70% a year earlier.

By the way, forage conditions continue strongly positive compared to last year, with

64% of the nation’s pasture and range was rated in Good or Excellent condition, compared to 41% last year. 10% was rated as Poor or Very Poor, compared to 29% a year earlier. States with 20% or more rated as Poor or Very Poor include: AZ (35%); CA (40%); NM (39%); OR (23%); WA (22%).

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Major U.S. financial indices edged lower Tuesday, despite another round of positive quarterly earnings reports from heavyweights such as Proctor & Gamble and Merck. Pressure came from comments made by President Trump, which some investors, apparently, feared would stall trade negotiations with China.

The Dow Jones Industrial Average closed 23 points lower. The S&P 500 closed 7 points lower. The NASDAQ was down 19 points.

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“If feedstuff costs do not skyrocket, cattle feeders are expected to generally breakeven or post small profits late this year,” say analysts with the Livestock Marketing Information Center (LMIC). “In the situation where corn cost is already locked-in, November breakeven sales price is in the range of $105.50-106.50/cwt. per cwt., and $111-112 for December.”

LMIC calculated the June closeout at -$60.66 for steers placed on feed in a Southern Plains feedlot weighing 750 lbs.

For the same month, Iowa State University (ISU) calculated a loss of $39.71 per head for yearling-placed cattle; -$100.61 for calf-feds closed out in June. Both of the calculations include a manure credit.

“Neither the LMIC nor ISU estimates are survey-based, but they do provide indications of the direction of change,” say LMIC analysts, in the latest Livestock Monitor. “Of course, in late 2018 and the first several months of 2019 many cattle feeders had much worse results than these calculations, which are based on normal weather. Very muddy feedlot conditions resulted in red ink for many cattle feeders. The baseline production systems and assumptions for the LMIC and ISU are different. Besides using different prices and costs, ISU incorporates, for example, Modified Distillers Grains in the ration, which is a common feedstuff there.”

Negotiated cash fed cattle trade ended up steady to $1 higher on a live basis last week at $112/cwt. in the Southern Plains, mostly $115 in Nebraska and $115-$116 in the western Corn Belt. Dressed sales were steady at $182-$185.

Week to week on Monday, the 5-area direct average price for fed steers was $113.68/cwt., 66¢ higher than the previous week.

Softer Lean Hog futures pressured Live Cattle after early-session support Monday. Higher grain futures weighed on Feeder Cattle.

Other than unchanged at either end of the board, Live Cattle futures closed an average of 44¢ lower.

Feeder Cattle futures closed an average of 99¢ lower, across a range of 70¢ lower at the back to $1.42 lower in spot Aug.

Corn futures closed mostly 1¢ to 2¢ higher.

Soybean futures closed mostly 3¢ to 5¢ higher

Wholesale beef values were higher on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.09 higher Monday afternoon at $213.26/cwt. Select was $1.42 higher at $189.76.

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Major U.S. financial indices basically paddled in place Monday, amid mixed quarterly corporate earnings reports. The backdrop for the week includes the Fed meeting Wednesday and renewed trade negotiations between the U.S. and China.

The Dow Jones Industrial Average closed 28 points higher. The S&P 500 closed 4 points lower. The NASDAQ was down 36 points.

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Weak hide prices continue to weigh on beef byproduct values.

“In the period 2013-2017, hide values (butt-branded, steer) averaged $74.36/piece (animal) and represented 52.3% of total byproduct value,” explains Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “In 2018, hides represented 45.6% of byproduct value with an average value of $47.93/piece. In the first half of 2019, hides averaged $34.46/piece and accounted for 36.6% of total byproduct values. The June monthly average hide value was $27.60/piece. The global hide market continues to weaken.”

Overall, Peel says byproduct values declined from about $10.70/cwt. early in 2018 to about $9 by the end of the year.

“Byproducts represented 8.2% of fed cattle prices in 2018 at an average value of $9.60/cwt. on a live-weight basis,” Peel says. “The latest weekly byproducts value was $8.88/cwt for the week of July 26, 2019. For the first 29 weeks of 2019, by-products have averaged $8.78 or 7.2% of fed cattle prices.”

“Hide supplies are larger as a result of increased cattle numbers and slaughter, especially in Brazil and the U.S. Some hides are being salted and stockpiled which may limit value improvement going forward,” Peel explains. “China is the major global buyer of hides and demand in China is hampered by tariffs and trade disruptions and by stronger environmental regulations impacting small tanneries. Hide values are so low that more hides are being rendered in some markets and some hides are not worth marketing in other markets. In Australia, for example some hides are being exported for a loss simply because the cost of environmental regulations to dispose of the hides is a greater loss. Other factors affecting hide values are exchange rates and less demand for leather in luxury cars and footwear, which are using more synthetic materials.”

Negotiated cash fed cattle traded at $112/cwt. in the Texas Panhandle on Friday, according to the Texas Cattle Feeders Association. That was $1 more than a week earlier.

Elsewhere, prices were yet to be established through late afternoon, according to reports from the Agricultural Marketing Service. Although too few to trend, there were some early live sales reported in the Western Corn Belt at $115-$116 and a few in the beef at $185. Those prices are at the top of the region’s range the prior week.

Feeder Cattle futures gained on softer corn prices, while Live Cattle treaded water.

Live Cattle futures closed from 5¢ lower to 12¢ higher, amid light trade.

Feeder Cattle futures closed an average of 41¢ higher, across a range of 5¢ higher at the back to 95¢ higher in spot Aug.

Corn futures closed 2¢ to 4¢ lower through Jul ’20 and then 1¢ lower.

Soybean futures closed mostly 1¢ higher through Aug ’20 and then 2¢ to 3¢ higher. 

Wholesale beef values were weak to lower on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 40¢ lower Friday afternoon at $212.17/cwt. Select was 84¢ lower at $188.34.

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Major U.S. financial indices closed higher Friday. Lusher quarterly earning reports from companies like Intel and Alphabet provided support. As well, second-quarter U.S. GDP growth was stronger than expected.

Real gross domestic product (GDP) increased at an annual rate of 2.1% in the second quarter of 2019, according to the advance estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.1%.

The Dow Jones Industrial Average closed 51 points higher. The S&P 500 closed 22 points higher. The NASDAQ was up 91 points.

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The price Index for beef and veal through June grew slower year over year than food prices in general and overall consumer prices, according to the most recent Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics (BLS).

Compared to the previous year, the beef and veal price index this June was 0.6% higher, while the price index for all meats was up 1.3%. The index for pork prices was 2.0% higher; 0.4% lower for poultry.

More specifically, the food at home index increased 0.9% over the last 12 months, with all six major grocery store food group indexes rising over the span,

ranging from 0.3% (meats, poultry, fish, and eggs) to 2.3% (nonalcoholic beverages).

During the same period, the index for food away from home rose 3.1%, with the index for full service meals rising 3.3%, while the index for limited service meals increased 3.0%.

Over the last 12 months, the all items index increased 1.6%, before seasonal adjustment. Take food and energy away and the index was 2.1% higher year to year.

Negotiated cash fed cattle trade continued to be undeveloped through Thursday afternoon.

Cattle futures basically hovered in place, awaiting some cash direction.

Except for unchanged in Oct and 5¢ higher in Dec, Live Cattle futures closed an average of 13¢ lower.

Feeder Cattle futures closed an average of 21¢ higher in five contracts and an average of 11¢ lower in the other three.

Corn futures closed 1¢ to 5¢ lower through Sep ’20 and then fractionally lower.

Soybean futures closed mostly 4¢ to 8¢ lower. 

Wholesale beef values were lower on Choice and steady on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.03 lower Thursday afternoon at $212.57/cwt. Select was 24¢ lower at $189.18.

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Major U.S. financial indices closed lower Thursday. An assortment of underwhelming quarterly earnings reports was part of it. There was also chatter that investors feared the Fed might be less aggressive in cutting interest rates at next week’s FOMC meeting, based on recent positive economic news.

For instance, the U.S. Census Bureau announced that durable goods orders in June were up 2% compared to the previous month, which was more than traders expected. Also on Thursday, the European Central Bank left its lending rate unchanged, hinting at a more positive economic outlook for the region.

The Dow Jones Industrial Average closed 128 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 82 points.

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Feedlot marketing remains current, based on the most recent USDA slaughter and carcass grading data.

The average dressed steer weight for the week ending July 13 was 865 lbs., which was 4 lbs. more than the previous week but 2 lbs. lighter year over year, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed heifer weight of 791 lbs. was 1 lb. lighter than the previous week and 8 lbs. less  year over year. Fed cattle slaughter of 531,743 head for the week was 11,828 head more than the same week a year earlier. Total cattle slaughter of 658,432 was 8,134 head more.

As for grading, 77.72% of carcasses graded Choice and Prime the week ending July 12, according to USDA’s National Steer and Heifer Estimated Grading report. That was 0.91% less than previous week. Carcasses grading in the upper two-thirds of Choice were 0.22% less than the previous week at 31.51%.

For broader monthly perspective, total commercial red meat and pork production was record large for the month of June at 4.37 billion lbs., which was 1% more than the previous year, according to USDA’s monthly Livestock Slaughter report. That was with one less business day in the month this year.

However, beef production in June of 2.2 billion lbs. was 3% less than the previous year, with the month’s 2.80 million head of total cattle slaughter 2% less year over year.

Pork production of 2.13 billion lbs. in June was 6% more than the previous year, with hog slaughter of 9.99 million head 4% more than last year.

For January through June, commercial red meat production of 26.8 billion lbs. was 2% more than the same period a year earlier. Accumulated beef production was up slightly from last year, veal was down 1% and pork was up 4%. Lamb and mutton production was down 1%.

There was little to no country trade for negotiated cash fed cattle through Wednesday afternoon, but early signs pointed to steady money or just either side of even.

Slaughter steers sold steady to $1 higher at Sioux Falls Regional in South Dakota. Slaughter heifers sold steady to $2 higher.

At the fat auction in Tama, IA, however, Choice Steers and heifers sold 75¢ to $1 lower: $117.30/cwt. for Ch 2-4 steers at an average of 1,339 lbs.

There were only 378 head offered in the weekly Fed Cattle Exchange auction and no takers.

Cattle futures traded sideways until a bounce in Feeder Cattle.

Except for 15¢ lower in spot Aug and unchanged in Feb, Live Cattle futures closed an average of 10¢ higher.

Feeder Cattle futures closed an average of 34¢ higher.

Corn futures closed mostly fractionally lower.

Soybean futures closed mostly 4¢ to 5¢ higher. 

Wholesale beef values were steady to weak on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 18¢ lower Wednesday afternoon at $213.60/cwt. Select was 29¢ lower at $189.42.

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Major U.S. financial indices closed mixed Wednesday, with mixed quarterly earnings reports. For instance, AT&T and UPS beat expectations, while Boeing and Caterpillar disappointed.

The Dow Jones Industrial Average closed 79 points lower. The S&P 500 closed 14 points higher. The NASDAQ was up 70 points.

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This year’s estimated calf crop of 36.3 million head is 102,700 head fewer (-0.3%) than the same period a year earlier, according to last week’s semiannual Cattle report from USDA. That’s with an estimated 26.5 million calves born in the first half of 2019, which would be 100,000 fewer than the same period last year.

“This combined with steer slaughter below a year ago, fewer steers on feed and elevated cow and heifer slaughter indicate that the data is supporting a lot of anecdotal stories over the last couple of years of reproductive problems,” says David Anderson, Extension livestock economist at Texas A&M University, in the most recent issue of In the Cattle Markets. “Reports of reproductive problems have often been attributed to extreme weather events, but also some uncertain factors. This combination of data might also suggest that the calf crop or maybe even the cow herd has been slightly overestimated the last couple of years.”

Although increasing Corn futures capped gains, Live Cattle futures closed higher again Tuesday, helped along by resurgent Lean Hogs. Feeder Cattle futures mostly edged higher.

Live Cattle futures closed an average of 47¢ higher.

Except for unchanged in Nov and 5¢ lower in Jan, Feeder Cattle futures closed an average of 5¢ higher.

Corn futures closed 2¢ to 4¢ higher through Sep ’20 and then mostly 1¢ higher.

Soybean futures closed 1¢ to 2¢ lower through Aug ’20 and then unchanged to fractionally mixed.

Wholesale beef values were steady to firm on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 46¢ higher Tuesday afternoon at $213.78/cwt. Select was 12¢ higher at $189.71.

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Major U.S. financial indices closed higher Tuesday, with announcement that the U.S. and China will resume trade talks in person next week. Better than expected quarterly earnings reports from the likes of Coca-Cola and United Technologies also provided support.

The Dow Jones Industrial Average closed 177 points higher. The S&P 500 closed 20 points higher. The NASDAQ was up 47 points.

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Beef burgers are still by far the most popular burger ordered at quick service restaurants (QSRs). There were 6.4 billion beef burgers ordered at QSRs in the year ending May 2019, according to The NPD Group (NPD). Although growth is flat compared to year ago, beef burgers are still the top sandwich ordered at U.S. restaurants, reports NPD’s CREST^®service, which continually tracks how U.S. consumers use restaurants.

With that said, there were 228 million servings of plant-based burgers ordered at QSRs in the year ending May, up 10% from a year ago. NPD analysts say the strong year-over-year growth of plant-based burgers is primarily due to increased availability at major QSR chains.

Beef burger buyers, who purchased beef burgers at QSRs an average of 18 times in the year ending April 2019, did give plant-based burgers a try, purchasing them at QSRs two times in the period. Conversely, 95% of plant-based buyers made a beef burger purchase within the past year, according to NPD’s receipt harvesting serving, Checkout.

Although vegetarians and vegans are contributing to the growth in plant-based, they still represent a small (single digits) percentage of the U.S. population and aren’t the primary contributors.

Instead, the NPD folks say the popularity of plant-based foods is being fueled by consumers’ desire to add protein to their diets, concerns for animal welfare and how meat products are brought to market, sustainability, and what they perceive to be healthier nutrition.

Neutral Cattle on Feed numbers and neutral to softer overall inventory numbers in the semiannual Cattle report helped Cattle futures rally to start the week. Lower grain prices also helped.

Live Cattle futures closed an average of 54¢ higher.

Feeder Cattle futures closed an average of $2.20 higher.

Grain futures fell, presumably on expectations of more favorable growing weather.

Corn futures closed 7¢ to 9¢ lower through Jul ’20 and then mostly fractionally lower to 1¢ lower.

Soybean futures closed mostly 10¢ to 13¢ lower. 

Wholesale beef values were steady on light to moderate demand and offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 10¢ lower Monday afternoon at $213.32/cwt. Select was 8¢ higher at $189.59.

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Major U.S. financial indices edged higher Monday, with quarterly earnings reports from the likes of Amazon and Facebook surpassing expectations.

The Dow Jones Industrial Average closed 17 points higher. The S&P 500 closed 8 points higher. The NASDAQ was up 57 points.

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“If both domestic and international demand for U.S. beef continues at current levels, there will be little or no pressure on cattle markets,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in his weekly market comments. “If something should happen to weaken beef demand in the U.S. or in global markets, lower beef and cattle prices could result in some liquidation of cattle inventories.”

In the meantime, Peel says the cattle inventory revealed in Friday’s semiannual USDA Cattle report suggest the nation’s beef cowherd is at a plateau. As mentioned in Monday’s Cattle Current, the 34.0 million head of beef cows and the 103 million total cattle and calves July 1 were the same as a year earlier.

“I contrast a plateau with a more typical cyclical peak inventory that historically has implied a liquidation phase to follow,” Peel explains. “The current inventory levels do not suggest a need for, or an inevitable, liquidation in cattle inventories at this time. Stable cow numbers and calf crop suggest that beef production will show little or no growth going into 2020. Current beef production levels and cattle prices are sustainable until something changes to provoke a new direction in cattle inventories.”

In fact, Peel says the U.S. cattle and beef industry may be the most stable he can ever remember. 

“This is pretty remarkable, given the continued turbulence in external market conditions,” Peel says. “Numerous factors that could destabilize cattle markets should be monitored, including: corn prices and feed market conditions; the impacts of African Swine Fever on global protein markets; U.S. macroeconomic conditions; and exchange rates among others. Additionally, progress or lack thereof on current trade politics or new trade issues that could arise will have a large impact, positive or negative, on the overall climate for beef and cattle markets.”

Negotiated cash fed cattle trade ended up mainly steady to $1 lower last week at $111/cwt. in the Southern Plains, $113.00-$113.50 in Nebraska and $114-$116 in the western Corn Belt. Dressed trade was steady at $182-$185.

Cattle futures closed higher Friday, with support from Lean Hogs and perhaps some boost from the potential impact excessive heat will have on production.

Live Cattle futures closed an average of 52¢ higher.

Feeder Cattle futures closed an average of 45¢ higher.

Corn futures closed 5¢ to 6¢ higher through Jul ’20 and then mostly 1¢ higher.

Soybean futures closed 15¢ to 20¢ higher through Sep ’20 and then mostly 13¢ higher.

Wholesale beef values were steady on Choice and higher on Select with moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 8¢ higher Friday afternoon at $213.42/cwt. Select was 90¢ higher at $189.51.

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Major U.S. financial indices closed lower Friday, amid mixed quarterly earnings reports and geopolitical angst stemming from Iran’s seizure of a British oil tanker.

The Dow Jones Industrial Average closed 68 points lower. The S&P 500 closed 18 points lower. The NASDAQ was down 60 points.

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There were no surprises in Friday’s monthly USDA Cattle on Feed report (feedlots with 1,000 head or more capacity), with the numbers about dead on with pre-report estimates.

Cattle feeders placed 1.76 million head in June, which was 2.34% (-42,000 head) less than a year earlier. In terms of placement weight, 38.72% weighed less than 699 lbs., 44.48% weighed 700-899 lbs. and 16.80% weighed 900 lbs. or more.

Marketings in June of 1.94 million head were 3.04% (-61,000 head) less than the previous year, keeping in mind there was one less business day this year.

Cattle on feed July 1 of 11.48 million head were 1.75% (+198,000 head) more than last year. This makes the third month in a row that the on-feed number was the largest since the data series began in 1996, according to the Agricultural Marketing Service.

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USDA’s semiannual Cattle report hints at slowing herd expansion and fewer calves year over year.

The nation’s herd of beef cows—34.0 million head—was the same as a year earlier.

All cattle and calves were 103 million head July 1, even with the same time a year ago.

The estimated feeder cattle supply outside feedlots July 1 was 37.1 million head, which is 0.3% more than last year. However, the 4.4 million head of heifers for beef replacement were 200,000 head (-4.5%) less than the previous July.

As well, this year’s estimated calf crop of 36.3 million head was 102,700 (-0.3%) fewer than the same period a year earlier. That’s with an estimated 26.5 million calves born in the first half 2019, which would be 100,000 fewer than the same period last year.

Negotiated cash fed cattle trade continued mainly steady to $1 lower on Thursday, with prices so far this week at $111/cwt. in the Southern Plains, $114-$116 in the western Corn Belt and $113.00-$113.50 in Nebraska. Dressed trade so far this week is at $182-$185.

Cattle futures closed lower Thursday, with limited trade, some technical correction and likely positioning ahead of Friday’s monthly Cattle on Feed report.

Live Cattle futures closed an average of 72¢ lower.

Feeder Cattle futures closed an average of $1.20 lower.

Sagging corn export sales helped pressure Corn futures 9¢ to 11¢ lower through Jul ’20 and then mostly 1¢ to 2¢ lower.

Soybean futures closed mostly 1¢ lower to 1¢ higher.

Wholesale beef values were firm to higher on moderate to good demand and moderate offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was 77¢ higher Thursday afternoon at $213.34/cwt. Select was 27¢ higher at $188.61.

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Major U.S. financial indices edged higher Thursday, on mixed quarterly earnings and increasing chatter about the Fed cutting interest rates.

The Dow Jones Industrial Average closed 3 points higher. The S&P 500 closed 10 points higher. The NASDAQ was up 22 points.

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Carcass weights continued lower year over year for the week ending July 6, according to USDA’s Actual Slaughter Under Federal Inspection report. The average dressed steer weight was 861 lbs., which was 7 lbs. more than the previous week but 6 lbs. lighter than the same week a year earlier. The average dressed heifer weight was 792 lbs., which was 3 lbs. more than a week earlier but 5 lbs. lighter year over year.

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Heading into Friday’s monthly Cattle on Feed report, a survey of analysts by Urner Barry suggests 2.1% fewer cattle were placed on feed in June than the previous year. That’s the average of estimates that range from 6.8% fewer to 5.7% more, according to the Daily Livestock Report.

The average estimate for marketings is for 3% fewer, keeping in mind one less business day this year.

On average, estimates see the July 1 on-feed inventory being 1.8% more.