Feeder cattle review: Dryness puts downside pressure on market

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Compared to last week, feeder steers and heifers weighing over 650 lbs sold 4.00-8.00 lower with many instances as much as 12.00 lower especially in the Northern Plains.  Calves under 650 lbs traded fully 5.00 to 15.00 lower with the driest areas quoting lightweights as much as 20.00 lower and the popular 500 lb calf seeing the full decline.  Dry weather concerns are to blame for the lion’s share of the extreme downside pressure that has culminated over the past 2-3 weeks with 72 percent of the continental US now rated abnormally dry or worse, compared to just 32 percent last year when the Southwest underwent their historical herd sell-off. 

This summer the drought sales are happening all over the Atlas and despite a considerable effort to retain replacement quality heifers last fall and this spring, herd rebuilding will have to wait for at least another year.  Top quality cow/calf pairs and fall calving bred cows are flooding parched markets out west and down in the Ozarks, but buyers are running out of addresses to send these displaced replacements.  Dry, hot weather is also forcing feeder cattle to market; the Eastern Missouri Commission Company near the Illinois line in Bowling Green, MO received a 700 head consignment from two hours south of St. Louis this Friday.  These cattle were mostly black with a medium backgrounding-lot flesh condition and good enough to put on a Nebraska/Iowa order; a load of steers weighed 665 lbs at 151.25, while 435 head of similar heifers averaged 707 lbs at 138.10. 

The curled-up condition of the corn across most of the Midwest sent CBOT contracts soaring early in the week while CME feeder cattle futures plummeted.  Later in the week, feeder contracts regained much of their loss but cash corn prices still topped 7.00 in Kansas City and Omaha by Friday.  The USDA’s planted corn acreage estimate was increased about a half million acres from late March prospective plantings to 96.41 million acres.  Early this past spring, analyst thought that anything over 90 million acres would give us all the corn we would ever need, but evaporating crop conditions have lowered yield expectations and this year’s harvested acres were adjusted down to 88.9 million acres with some likely to be abandoned and much expected to be cut for silage. 

Early this week it appeared as though the Western Corn Belt had caught a spark from the Colorado forest fire and popped the entire crop, but contrary to popular belief there are fields that look really good.  Certainly, most of farm and ranch country needs moisture but a good soaking rain in downtown Chicago could also help.  Let’s don’t forget that we just had the smallest calf crop in 60 years and beef is still a popular menu item for summer cookouts. 

Superior Video’s Week in the Rockies offered 230,000 head and it was tough sledding early in the sale but demand seemed to improve as they went.  The Clear Creek Cattle Company near Casper, WY sold nearly 1000 head of fancy Charolais steer calves with a base weight of 440 lbs at 225.00 for October delivery so maybe the world’s not coming to an end.  Early fed cattle sales in Kansas were steady at 116.00 while other areas continued to pass bids.  This week’s reported auction volume included 50 percent over 600 lbs and 39 percent heifers.        



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