Declining feedlot inventories continue to support ideas that the beef market is turning around. May’s report was the 13th consecutive month of year-over-year declines in feedlot inventories. Year-to-date beef production is down 4.5 percent, and, despite a global recession, beef demand has held up well with wholesale prices down about 4 percent from last year. Feeding margins are improving significantly from last winter’s losses, yet packer margins are eroding due to a 60 percent drop in byproduct values that are tied to weaker hide prices. Grain prices are trending higher, and feeding margins will be squeezed again this summer as Choice steer prices hover in the low $80s. Packer margins will remain under pressure until July.