Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.1 million head on July 1, according to the U.S. Department of Agriculture. The inventory was 3 percent above July 1, 2009.

The inventory included 6.25 million steers and steer calves, up 4 percent from the previous year. This group accounted for 62 percent of the total inventory. Heifers and heifer calves accounted for 3.77 million head, up 1 percent from 2009.

Cattle on feed July 1, from all feedlots in the United States, totaled 12 million, up 3 percent from the 11.6 million on July 1, 2009. Cattle on feed in feedlots with 1,000 or more head accounted for 84 percent of the total cattle on feed on July 1,, down slightly from 2009.

Placements in feedlots during June totaled 1.63 million, 17 percent above 2009. Net placements were 1.57 million head. During June, placements of cattle and calves weighing less than 600 pounds were 440,000, 600-699 pounds were 300,000, 700-799 pounds were 408,000, and 800 pounds and greater were 480,000.

Marketing of fed cattle during June totaled 2 million, slightly above 2009.

Hoops’ analysis: This report looks very uneventful for the market. Placements were less than the trade expected, which should provide support for the deferred contracts. Marketing was slightly below expectations, however the trade has given no indication that cattle are being backed up in feedlots. The market has closely followed the cash trade in recent weeks and this report should not change that pattern.

Cold storage report

Frozen food stocks in refrigerated warehouses on June 30 were greater than year earlier levels for eggs, cheese and chicken. Butter stocks were down 7 percent from last month and down 25 percent from a year ago.

Total red meat supplies in freezers were down 3 percent from the previous month and down 22 percent from last year. Frozen pork supplies were down 8 percent from the previous month and down 29 percent from last year.

Stocks of pork bellies were down 20 percent from last month and down 54 percent from last year. Total frozen poultry supplies on June 30, 2010 were up 2 percent from the previous month but down 6 percent from a year ago.

Total stocks of chicken were down 3 percent from the previous month but up 2 percent from last year. Total pounds of turkey in freezers were up 9 percent from last month but down 15 percent from June 30, 2009.

Corn analysis

Corn closed the week $.23 1/2 lower. Last week, corn closed sharply lower. A huge volume week where the market closes higher, followed by a lower technical closing week, is normally a sign of a significant top in the market. In most of the key growing areas in the United States, weather conditions are nearly ideal and most producers indicate a huge crop will be harvested with good growing weather into harvest.

This should limit the remaining upside potential for prices. Last week’s crop progress report showed national good-to-excellent ratings were 72 percent, 1 percent lower compared to a week ago. Iowa is rated 69 percent g/e, Nebraska 84 percent g/e, Minnesota 90 percent g/e, Illinois 67 percent g/e and Indiana at 62 percent g/e. 9 percent of the crop is rated either poor or very poor. Last year’s ratings were 71 percent g/e and 7 percent p/vp.

The weekly export sales report showed net sales of 614,100 metric tons for delivery in 2009/10 were down 9 percent from the previous week and 17 percent from the prior four-week average. This year’s export profile is now at 1.988 billion bushels versus the USDA forecast of 1.95 bb.

Strategy and outlook: Hedgers have sold a portion of the 2010 crop when December futures traded above $4.50. The next sales objectives for corn producers has been met when corn traded between $3.80 and $4. Producers should have bought new crop put option protection at this level.

Soybean analysis

Soybeans closed the week $.02 1/2 lower from last week. The USDA reported a 115,500 MT sale to China, a 175,000 MT sale to China, a 110,000 MT sale to South Korea and a 175,500 MT sale to an unknown destination.

The June soybean crush was reported at 129.2 million bushels, solidly below expectations of 132.1 mb and was down from May crush of 133 million and last year’s 140.1 million.

The USDA reported crop ratings of 67 percent g/e, up 2 percent from last week. Iowa is rated 69 percent g/e, Illinois at 64 percent g/e, Indiana 62 percent g/e, Minnesota 84 percent g/e and Nebraska at 84 percent g/e. 9 percent of the crop is rated poor to very poor. Last year, 67 percent of the crop was rated g/e and 8 percent was rated p/vp.

The weekly export sales report showed net sales of 111,800 MT for delivery in 2009/10 were down 83 percent from the previous week and 70 percent from the prior four-week average.

Exports of 274,800 MT were up 33 percent from the previous week and 67 percent from the prior four-week average.

Strategy and outlook: Producers have sold 2010 crop when November futures traded above $10.30 and at the $9.87 level.

The next sales objectives for producers have been met when November traded between $9.45 to $9.62.

Producers should have purchased new crop put option protection at this level.

Brian Hoops is president and senior market analyst of Midwest Market Solutions Inc. Midwest Market Solutions is a full-service commodity brokerage and marketing advisory service, clearing through R.J. O’Brien.