August 28 Weekly Update

8/28 – In Friday’s Cattle on Feed Report, the USDA said new placements onto feedlots in July were just 2.7% above a year ago, breaking a string of 4 straight monthly double-digit percentage increases. Total feedlot inventories on Aug 1st were 10.6M head, 4.3% above a year ago. Cattle futures, which spiked to highs of $138.00/cwt in late April, closed at $105.95 on Friday. Forward contracts for the 2nd-half of 2017 are averaging $109.49 (vs $108.35 in 2016) and forward contracts for 2018 average $108.87 vs a projected $115.63 for 2017. In ground beef, 50s fat trimmings have slumped to $.59/lb after hitting record highs of $2.03 in May. 50s should stay in the $.50s through Sept; $.60s in Oct; $70s in Nov. 90s lean trim hit an annual high of $2.38 in July and remain high at $2.31. Look for 90s to slide toward $2.00 by Dec on seasonally increasing domestic cow slaughter.