Negotiated cash fed cattle trade was mostly inactive on very light demand in the western Corn Belt through Monday afternoon. Elsewhere, it was at a standstill, according to the Agricultural Marketing Service.
Last week, live prices were at $120/cwt. in the Texas Panhandle, $120-$121 in Kansas, $122-$126 in Nebraska, $122-$123 in Colorado and at $122-$124 in the western Corn Belt. Dressed prices were at $196 in Nebraska and at $194-$196 in the western Corn Belt.
Cattle futures closed lower again Monday, especially Feeder Cattle as Corn futures continued to climb higher.
Live Cattle futures closed an average of 45¢ lower.
Feeder Cattle futures closed an average $1.51 lower.
Choice boxed beef cutout value was 12¢ higher Monday afternoon at $276.17/cwt. Select was 3¢ higher at $269.13.
Corn futures closed 6¢ to 8¢ higher through Sep ‘22, and then mostly 3¢ to 4¢ higher.
Soybean futures closed 10¢ to 16¢ higher through the front five contracts, 6¢ to 9¢ higher through the next four contracts and then mostly 1¢ to 3¢ higher.
Major U.S. financial indices closed lower Monday, led by big tech stocks.
The Dow Jones Industrial Average closed 123 points lower. The S&P 500 closed 22 points lower. The NASDAQ was down 137 points.
Drought is already forcing cowherd liquidation in Texas and the Dakotas, says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University. That follows a 14.5% decline in Colorado beef cow numbers—year over year Jan. 1.
“Drought conditions since last fall are the worst since 2013,” Peel says, in his weekly market comments.
The measuring stick is the weekly U.S. Drought Monitor (USDM), which classifies the percentage of the nation that is Abnormally Dry (D0) or experiencing one of four degrees of drought, ranging from Moderate Drought (D1) to Exceptional Drought (D4).
For the week beginning Apr. 13, 62.55% of the Continental United States was classified from Abnormally Dry to Exceptional Drought, compared to 25.58% at the same time last year.
More specifically, Peel shares details about the USDM Drought Severity and Coverage Index (DSCI), which combines the drought categories into a single number.
“The DSCI can range from 0 (zero abnormally dry or drought conditions) to 500 (100% D4, Exceptional Drought),” Peel explains. “The current DSCI for the continental U.S. is 169, compared to 45 one year ago. Since the Drought Monitor began in 2000, the U.S. DSCI has only reached a level of 200 for a total of 22 weeks (all in 2012 and early January 2013), with a maximum of value of 215. Coming summer weather raises the odds of further increases in drought. ”
“In any specific location, the drought situation right now will set the stage for the next year,” Peel says. “In many parts of the country, the next two months may determine much of the forage production for the next 12 months. Regions such as the Southwest and the southern Rocky Mountains have been in drought for many months and face limited forage prospects this year unless moisture arrives very soon.”
As examples, Peel notes the DSCI in New Mexico is currently 433 and is 301 in Colorado. North Dakota currently has a DSCI of 367, a record level of drought in the state, Peel says. The DSCI is 227 in South Dakota and 236 in Texas.
“These regions may produce little or no forage this year, making drastic management actions likely. Herd liquidation is already occurring and may accelerate quickly in these regions,” Peel says. “Producers in all drought areas need to inventory current forage and hay reserves and carefully evaluate forage production potential at this time. This will provide the basis for a drought action plan that can help guide what and when decisions must be made going forward.”
One source for management considerations can be found in the “Managing Cattle and Forages in a Dry Weather Pattern” section at the OSU beef Extension Ranchers Thursday Lunchtime Webinar series.