Currency devaluation in China this week is calling into question the strength of international beef demand that can be expected in the months to come. The China devaluation of 4.4% is the largest in more than 20 years. According to USDA/FAS, China is projected to account for 6.4% of global beef imports this year. That figure was well below 1% prior to 2012.

Expectations for U.S. net exports of beef continue to decline, with projections released by USDA this week now pegging the U.S. as a 1.1 billion pound net importer of beef this year. This is the largest amount of net imports since 2007, when exports were still severely curtailed due to BSE. As beef production begins to increase in 2016, the year over year quantity of beef available to the domestic market will likely grow the most since 2004.

Boxed beef cutout values were up for the week, with the choice-select spread widening as well. The choice carcass cutout value this morning registered $244.61/cwt, up $9.14 from last Friday but still $11.43 below a year ago. The select cutout was $234.78/cwt, resulting in a choice-select spread of $9.83/cwt, an increase in the spread of $3.50/cwt. vs. last week.

Fed cattle prices also advanced. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $152.73/cwt, up $4.25 from last week and just $2.01 lower than a year ago. The 5 area average dressed price for steers gained $5.54 this week to $239.29/cwt. This is $4.40 lower than last year's dressed price average.

Cattle slaughter for the week was 540 thousand head, up 5 thousand from last week but 6.9% 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 August 1 was 886 pounds, 2 pounds above the prior week and 12 pounds heavier than the same week last year.

Feeder steer and calf prices at Oklahoma City this week were steady to $4 higher. Prices for medium and large frame #1 steers by weight group were: 400-450# $285-$313, 450-500# $270-$289, 500-550# $250-$264, 550-600# $236-243.75, 600-650# $225-$246, 650-700# $216-$239.50, 700-750# $215-$228, 750-800# $212.50-$221.25, 800-900# $207-$220.25 and 900-1000#, $202-$210.25/cwt.

The August live cattle futures contract closed at $148.72/cwt today, down 85 cents for the week. October fed cattle settled at $147.30/cwt and December at $149.12. The September feeder cattle contract lost $1.17 this week to end at $209.40/cwt.

Developments on the feed side remain positive for livestock producers. Though pasture conditions retreated from 58% to 55% good/excellent for the week ending Aug. 9, conditions have only been better this deep into August one other time (2010) in the past 20 years. The monthly Crop Production report released this week by USDA surpassed the market expectations for this fall's corn and soybean crops, sending feed market prices down sharply mid-week.

September corn closed today at $3.64/bu, down 8.5 cents from last Friday. December closed at $3.76.