The semiannual cattle inventory report from USDA confirmed that beef cow expansion is continuing. The nation's beef cow herd as of July 1 was at 30.5 million head, 2.5% above July 2014. Total cattle inventory came in at 98.4 million, 2.1 million more than July of last year. The calf crop for 2015 was estimated at 34.3 million. If realized, the calf crop will be larger than the previous year for the second consecutive year. The last time we saw growth in the calf crop for two years in a row was 1994-95.

Pasture conditions continue to support the herd expansion. 63% of the nation's pastures and ranges rated good/excellent in this week's survey, down 2% from the previous week but 10% above the same week a year ago. For comparison, we were dealing with good/excellent readings between 15-20% as recently as July 2012.

Commercial beef production in June was down 3.3% vs. June 2014, marking the eighteenth consecutive month in which beef production trailed the year ago level. And this despite the fact that dressed cattle slaughter weights eclipsed the June 2014 level by 18 pounds last month. Despite the reduction in domestic production, frozen beef in storage at the end of June registered 30.4% above last year's level. High beef import levels continue to help balance reduced domestic production.

Fed cattle prices fell again this week. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $145.40/cwt, down $0.60 from last week and $17.46 lower than a year ago. The 5 area average dressed price for steers retreated $2.97 this week to $232.03/cwt. This is $24.30 lower than last year's dressed price average.

Boxed beef cutout values also declined this week. The cutout value for choice carcasses this morning was $231.00/cwt, down $2.31 from last Friday and $26.30 below a year ago. The select cutout was $228.60/cwt, resulting in a choice-select spread of just $2.40/cwt.

Cattle slaughter came in at 539 thousand head this week, up 1 thousand from last week, but 5.8% lower than the same week last year. Year to date cattle slaughter trails 2014 by 6.9%. The average dressed weight for steers slaughtered the week ending July 11 was 885 pounds, 10 pounds heavier than last week and 20 pounds heavier than the same week last year.

This week's feeder cattle prices at Oklahoma City were weak to $5 down on lower numbers as high heat and humidity limited movement. Prices for medium and large frame #1 steers by weight group were: 400-450# $295-$311, 450-500# $290-$305, 500-550# $255-$270.50, 550-600# $263, 600-650# $226.75-$244, 650-700# $222-$242, 700-750# $220-$232, 750-800# $215-$224, 800-900# $208-$218.75 and 900-1000#, $196-$210.75/cwt.

The August live cattle futures contract closed at $142.97/cwt today, down $3.67/cwt for the week. October fed cattle settled at $144.05/cwt and December at $146.85. The August feeder cattle contract lost $5.45 on the week to end at $209.75/cwt.

September corn closed today at $3.925/bu, down nearly 28 cents from last Friday.