The Choice cutout increased thru May and stayed elevated thru June as tight market-ready cattle supplies, seasonal grilling/summer holiday demand, & strong exports supported prices; it peaked at $2.51/lb. in mid-June, before sliding through mid-July as demand slowed after July 4th. For wk ending July 21, it was $2.08/lb, up 3% from 2016 but 2% below the previous 5-yr ave.
The Choice/Select cutout peaked a record $0.30/lb in May but has since narrowed to $0.12/lb.
Choice flanks ($1.17, +13%), short plates ($1.61, +10%), chucks ($1.67, +10%), rounds ($1.74, +8%), and ribs ($3.18, +3%) were higher yr-over-yr, while loins ($2.85, -5%) & briskets ($1.46, -6%) were lower.
Choice ribeyes set records in June following a run up in May; peaking at $10.30/lb mid-June before dropping to $6.90/lb (+3% yr-over-yr).

Ball tips ($2.75, +35%) & top butts ($3.67, +3%) were higher while tri-tips ($4.93, -14%), tenderloins ($9.41, -5%), & NY strips ($5.81, -8%) trended down from spring’s seasonal peaks--below yr-ago levels. 
Flank stk ($4.63, +17%) and top blade (flat iron) ($2.97, +4%) were up, while brisket ($2.06, -8%) & petite tender ($3.34, -19%) were lower. Rib short ribs ($4.84, +18%), chuck short ribs ($3.69, +21%), top/inside rounds ($2.26, +17%), shoulder clods ($1.97, +5%), & chuck rolls ($2.46, +4%) remained above yr-ago levels with strong export demand.
50% trim has dropped since its rise to over $2.00/lb in mid-May, nearly 4X higher than yr-ago and then declined to $0.89/lb., -2% (below levels for the 1st time since Mar).
USDA’s 2017 production forecast is +5.1% (12.02 mill MT); 2018 to +2.2% (12.28 mill MT)—which is 1% lower than 2002’s record. Thru early-July, fed beef production was +4%, following a 7% increase in 2016; Choice beef was +7.2%, following 2016’s 8.4% increase. 5.5% graded Prime, 72% Choice, & 18.3% Select; more graded PR & CH than 2016. July’s Cattle on Feed was 4% above 2016 and 4% above the previous five-yr ave.
Placements had double digit increases so this should generate higher numbers of mkt-ready supplies in Aug. The USDA July Cattle Inventory report showed continued growth in the cattle herd, but a slowdown in expansion/fewer heifers retained as replacements. Cash steer prices were up 3% from last yr at $1.20/lb late July.

SOURCE: USMEF