Feeder Cattle futures bounced an average of $2.34 higher Tuesday, regaining some of the recent losses. Support included Corn futures closing 3¢ to 5¢ lower through Sep ’23 and then mostly 1¢ lower.
Feeder Cattle also received support from Live Cattle futures closing an average of 91¢ higher (22¢ higher at the back to $1.57 higher toward the front), likely due in part to notions that cash fed cattle prices can build on last week’s advance.
Negotiated cash fed cattle trade ranged from a standstill to limited on light demand through Tuesday afternoon, according to the Agricultural Marketing Service. There were a few early live sales in the western Corn Belt at $146/cwt., but too few to trend.
Last week, live prices were $144/cwt. in the Southern Plains, $145-$148 in Nebraska and $145-$149 in the western Corn Belt. Dressed prices were $230.
Choice Boxed beef cutout value was $2.12 higher Tuesday afternoon at $246.75/cwt. Select was 97¢ lower at $212.85/cwt.
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Major U.S. financial indices closed little changed Tuesday with investors apparently waiting for more direction from weekly economic reports.
The Dow Jones Industrial Average closed 36 points higher. The S&P 500 closed 23 points lower. The NASDAQ was down 115 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.75 to $1.84 lower though the front six contracts.
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Drought continues to expand and deepen, according to the latest U.S. Drought Monitor for the week of Oct. 4.
77.4% of the nation was classified from abnormally dry (D0) to exceptional drought (D4), compared to 62.4% at the same time last year. 52.6% was ranged from moderate (D1) to exceptional drought compared to 47.5% a year earlier. However, 32.4% was classified as severe (D2) to exceptional drought compared to 36.5% for the same week in 2021.
Approximately 66% of the U.S. cattle inventory was in areas experiencing drought, according to U.S. Crop and Livestock in Drought from NOAA and the National Integrated Drought Information System. At the same time last year, 35% of the nation’s cattle were in areas experiencing drought.
Derrell Peel, Extension livestock marketing specialist at Oklahoma State University provides some state perspective in his weekly market comments; virtually all of Oklahoma was in some stage of drought.
“There is little prospect for winter wheat grazing this fall. Hay supplies are very tight and a wide range of hay types and qualities are being offered. Failed summer crops are being baled for hay including grain sorghum and soybeans,” Peel says. “The water situation may soon be the most critical, even more than forage, for many producers. Water quantity and quality is low and decreasing rapidly. Oklahoma relies heavily on surface water ponds, which are filled by spring and summer thunderstorms. Ponds rarely get replenished in the winter, even in a normal year.”