Drought conditions, which advanced sharply in the late summer and fall, have decreased significantly with recent rains in Oklahoma.  The latest Drought Monitor, dated October 27, showed only 2.79 percent of Oklahoma with drought rated at D2 and zero in D3 and D4, the worst drought categories.  This was a significant improvement from the week prior.  Despite rains in other parts of the state, the north central region of the state, an important wheat production area, had gone nearly 50 consecutive days with less than one quarter inch of precipitation.  This region received up to an inch of rain as part of statewide rain coverage late last week.  Additional improvement in the reported drought conditions are expected this week.    Last week’s crop progress report showed that 85 percent of Oklahoma wheat was planted with 62 percent emerged.  Both of those figures are slightly lower than the five-year average for that date.  Recent rains will result in rapid wheat development and some wheat will be ready for grazing soon.

In the final report for the growing season, Oklahoma range and pasture conditions are rated about average for this time of year compared to non-drought years; with 78 percent of pasture rated fair to excellent.  In many cases, pastures still have some green and quality is good.  Estimated 2015 total hay supplies in Oklahoma are 7.3 million tons, the third largest annual hay supply ever for the state, and the largest since 2007.  It appears that Oklahoma is in good shape with respect to feed and forage supplies and is ready for winter. 

Feeder and fed cattle markets are still recovering from the heavy weight market purge in October.  Steer slaughter for the past four weeks is up nearly 8 percent from the same period one year ago, suggesting progress in cleaning up heavy weight fed cattle.  However, carcass weights have not yet confirmed a peak and the latest steer carcass weights are another record at 930 pounds.  In Oklahoma, prices for feeder steers under 600 pounds have recovered 9 to 10 percent from the early October lows.  Calf and stocker prices in November will be a balance between supply and demand conditions.  On the demand side, additional general cattle market recovery is likely with stronger feedlot demand to replace inventories possible and stocker demand likely will be boosted by better wheat pasture conditions. Seasonally, the fall run of calves typically adds supply pressure to feeder markets.  October auction market totals in Oklahoma were down 5.3 percent year over year, which may indicate that some feeder marketings were delayed during the market slump.  Replacement heifer demand is an unknown that may temper seasonal feeder supplies. This complex set of supply and demand factors make it very challenging to anticipate feeder prices in the coming weeks.  On balance, I would give slightly better odds for steady to somewhat higher prices through November but the downside risk remains.