Collectively, these estimates put next year's carry-over at 714 million bushels with a stocks-to-use ratio of 5.4%, which if realized would be the second lowest in recent memory. The lowest was the 1995/96 marketing-year when stocks fell to 426 million bushels as a result of much lower production - production in 1993 was markedly lower as well. Following the 1995 growing season, it took two years to push stocks back above the billion bushel mark but the dynamics of this market are much different today versus then.

The report came in the midst of a market free-for-all following the reduction in the United States' rating from Standard and Poor's. Since Monday of last week, the Dow Jones Industrial Average has seen three negative move days and four positive move days, but the down days outweigh the up moves by about 40 points. These types of events will continue to weigh on beef demand both in domestic markets and overseas.

Speaking of demand, the Outlook Board's projections for the beef industry showed a smaller forecasted per capita consumption number for this year and 2012. Lest we not forget that per capita consumption is not demand, per se, but it is an indicator of beef utilization. Offsetting the lower use of beef in the coming years is a year-over-year drop in production for 2010, 2011, and 2012. This reinforces the notion of tight supplies that continue to strengthen. Dry weather across many states in the southern U.S. continues to force many to scale back. Total meat and poultry production if forecast to increase over the coming years but is down from the previous month's estimates.

The Markets

Wholesale beef prices were higher last week. Choice and Select prices were up $3.24/cwt and $3.14/cwt finishing the week at $176.65 and $172.79, respectively. Fed cattle were up on the week as well with the 5-Area live price at $176.65/cwt, up just over $5, and the dressed price was up $9 at $184.77/cwt. Live sales in Texas sold at $116/cwt. In Nebraska, live cattle mostly sold from $116-$117, while dressed sales were at $185/cwt. Feeder steers in Oklahoma were up and down on the week, but feeders finished up $2/cwt and calves were unevenly steady. Omaha corn prices were up sic cents from the previous week at $7.20/bu. Despite the turmoil in the equity markets, futures were higher for both cattle and corn on the week. Corn futures received a boost Thursday as a result of the WASDE report and cattle moved higher due to stronger cash and beef prices.