Values in most markets were drifting lower. The average weekly price for the pork belly primal component of hog carcass set another record last week, but the record high daily price that was set Thursday, 27 July, was not breached last week.

The pork cutout value lost four cents a pound for the week based on declines of close to 10 cents for the butt and rib components. The national average price paid for barrows and gilts eased lower by $2 per cwt. Similar trends were in place for the cattle markets, with Choice steers losing $3 from the prior week.

The Choice Beef Cutout started out the week moving slightly higher from the prior week’s closing values that were the lowest since the last week in February, but beef trade volume was not sufficient to maintain a price uptrend. The Choice Cutout resumed a downward tilt from mid-week onward and the cattle trade suffered accordingly.

The initial USDA-AMS (Agriculture Marketing Service) estimate of livestock slaughter for the week put cattle numbers up 8 per cent (627,000 head) from a year ago and hog numbers up 2 per cent (2.239 million head).

Beef production for the week was up 5.7 per cent from a year ago and pork production was up 2.0 per cent. The Saturday hog slaughter estimate of 64,000 head was the biggest non-holiday week Saturday volume since mid-May but was still down 30 per cent from the same week in 2016.

The 2 per cent increase in hog slaughter continues to be a modest surprise relative to the USDA-NASS (National Agriculture Statistics Service) estimate of 4 per cent more market hogs on farms over 120 pounds than a year ago, as of 1 June.

Feeder cattle prices moved lower last week. Steers weighing 750-800 pounds at Oklahoma City declined $4 per cwt. in value to $138. Steer calf (500-550 pound) prices were also $4 lower to $150. Some of this decline was fallout from the USDA Cattle on Feed Report issued on the prior Friday that showed feedlot placements in June increased by 16 per cent from the prior June, much higher than market expectations.

Feeder cattle price trends in other regions of the country varied greatly during the week with 750-800 steers in the Northwestern US down $8 per cwt from the prior week (according to USDA-AMS in Washington state). For the same weight steers in Georgia, prices were up $1 per cwt. from the prior week.

Live cattle futures responded to the recent Cattle on Feed Report without hesitation to the downside. The August contract fell $3 early in the week and then began to recover. October and December futures fell by $3 to start and then continued down another $2, consistent with when the big feedlot placements in June will hit the slaughter cattle market.

Feeder cattle futures prices fell $3-$4 for most delivery months, similar to Oklahoma City cash values of the week. Hog futures held their value from the end of the previous week, ignoring the trends in the cattle market.

Historical weekly tendencies for the Choice Beef Cutout and Live Cattle futures for this week favor a reversal in recent trends. Over the last seven years, the Choice Beef Cutout went up 5 of those years and then went up 6 of the 7 years in the second week in August. In 2010 and 2014, the cutout moved lower during the week, with 2014 showing the bigger decline of $2.68 per cwt.

The August contract of the Live Cattle futures market has moved up 6 out of the last 7 years in both the first and second week of August. The exception year of Live Cattle futures performance was 2014. The October Live Cattle futures contract went up 6 of the last 7 years in the first week in August, similar to the August contract, but in the second week in August only went up 3 out of the 7 years.