Increasingly dry conditions throughout the nation’s major cow-calf producing areas has already forced early-movement of cattle off pastures, and dry weather has corn users nervous about the development of this year’s crop. Increasing corn prices will pressure replacement feeder cattle prices moving forward.
Cattle feeders were able to add another $1 to the cash trade last week as packers paid up to get cattle moving. Fed cattle traded $1 higher in Texas and Kansas at $122 per hundredweight, and $123 live or $195-196 per hundredweight dressed in Nebraska, also $1 higher for the week. Analysts continue to point toward increasing supplies of fed cattle in the coming weeks.
Boxed beef cutout values ended the week mixed, with Choice up a penny and Select down $2.65 per hundredweight compared to the previous Friday. Choice boxed beef was quoted at $197.26, and Select was pegged at $182.71. The Choice-Select spread ended the week at $14.55.
Yearling feeder cattle sold steady to instances of $2 per hundredweight higher, while calf prices were called uneven, from $5 lower to $5 higher. Drought conditions across much of cattle country is quickly becoming an influence on cattle prices, especially on lighter cattle. Heavier runs of cattle were noted at auctions in Missouri and Arkansas due to dry conditions, with Missouri auctions reporting 91 percent more cattle than the same week a year ago, and Arkansas auctions selling 140 percent more cattle than the same time last year.
Commenting on the Missouri-Arkansas drought situation, USDA Market News Reporter Corbitt Wall says, “Conditions may not be as severely dry as the Southwestern United States was last year, but the Acorn Belt is a rough and rocky country of heavily concentrated cow-calf production that normally permits fairly heavy stocking rates this time of year.”
Wall noted the dry conditions are already affecting this year’s corn crop. “The southern half of the Corn Belt is also suffering from a lack of moisture as late planted corn and soybean fields are dreadful. Early corn is rooted down and much more attractive to the eye, but rainfall is needed soon or this year’s grain production will fall well short of lofty expectations. Dry conditions are also keeping the demand for this spring and summer’s yearling feeders under wraps. Many market participants believed grass yearling prices could get out of hand this year with tight numbers available.”
Last week’s auction receipts totaled 206,200, compared to 115,800 the previous week and 168,200 last year. Direct sales of stocker and feeder cattle totaled 37,300 with video/Internet sales at 61,200. The weekly total was 304,700, compared to 263,500 last year.
Slaughter cows and bulls were called $3 to $6 per hundredweight lower as supplies increased. Cash corn prices increased 41 cents per bushel during the week, with Omaha closing at $6.29 per bushel on Friday.