Compared to last week, the downtrend continues in the feeder cattle markets as feeder cattle and calves traded unevenly steady to 5.00 lower early in the week turning mostly 7.00-10.00 lower from midweek on. CME cattle futures this week had a tough day on Tuesday latching on to a lead balloon that continued into Thursday and weighed heavily on the market. Long liquidation selling and feeder cattle futures looking at sharply lower feeder cattle index pressured prices.

The feeder cattle market is starting to break hard over the last several weeks and keeps buyers and sellers on the defensive and more conscious of bearish fundamentals. We have seen high prices continued to be paid for feeder’s premium to the fat cattle. Prices paid for feeder cattle up till now for the most part have been very good for the backgrounder and the cow/calf man. But break evens are so distant that it’s looking impossible for any results to be positive for the cattle feeder.

Northern Livestock Video out of Billings, MT held a three-day video auction this week selling over 93,000 head of top quality feeder calves and yearlings. Some of the top prices paid included 585 head of value added (all Natural) yearling steers weighing 950 lbs sold for 230.00 for November delivery. There was near 3000 head of 900-950 lb steers averaging 910 lbs that sold with a weighted average price of 216.84 for September delivery.

Boxed-beef values continue to washout with very few upside moves since before the 4th of July, as carcass values still try to carve out a summer low. Boxed-beef prices have reached their lowest levels since June 2014, as Choice product on Friday closed down 1.89 at 230.70. The market has been worried about consumer beef demand for a long time with concerns over increasing meat supplies of pork and chicken.

June beef stocks were at 467.136 million lbs which is 1.9 percent lower than last month but 30.4 percent higher than last year. Boneless beef has seen large increases of imports mainly from Australia showing increases of 210 million lbs compared to last year. June pork stocks were at 632.209 million lbs down 3.5 percent from last month and 17.6 percent higher than last year. Retail prices for June saw beef values hit an all-time high with the average price for all beef sold at retail averaging 6.11/lb. Pork prices have been declining after hitting their all-time highs last summer, the average retail pork prices for June averaged 3.70/lb.

The July 1st Cattle Inventory Report was released on Friday showing ranchers expanding the cattle herd for the first time since 2006. All cattle and calves came in at 98.4 million head, 2 percent higher than a year ago. Highlights included beef cows at 30.5 million head, up 3 percent from a year ago; Replacement heifers were at 4.90 million head, up 7 percent; steers over 500 lbs 14.1 million head, up 3 percent. The 2015 calf crop is expected to be 34.3 million head, up 1 percent from last year. Cattle on Feed Report was mostly neutral to slightly bearish with Cattle on Feed for July 1st at 102 percent; Placements at 101 percent were larger than expected; Marketings were at 95 percent. Grain is pretty much now focused on yield potential for this year’s crop. Crop variations will be widespread as the crop potential for the Western Corn Belt is in much better shape than the potential of the eastern Corn Belt. Auction volume included 55 percent over 600 lbs and 35 percent heifers.