The five-area direct weighted average steer price was $103.12/cwt. on a live basis last week, which was $1.97 less than the prior week. The weighted average dressed price of $163.07 was $3.46 lower.
Cattle futures extended gains, though, with apparent correction from recently oversold conditions.
Live Cattle futures closed an average of $1.14 higher (75¢ to $1.65 higher).
Feeder Cattle futures closed an average of 96¢ higher (60¢ to $1.35 higher).
Choice boxed beef cutout value was $1.03 lower Tuesday afternoon at $224.82/cwt. Select was 84¢ lower at $208.46.
Corn futures closed 3¢ higher through Jly ’21 and then mostly fractionally higher to 1¢ higher.
Soybean futures closed 3¢ to 5¢ higher through Mar ’21 and then 1¢ to 2¢ higher.
Major U.S. financial indices closed sharply lower Tuesday, with continued correction and readjustment in big tech stocks.
West Texas Intermediate Crude Oil futures on the CME were $2.72 to $3.01 lower through the front six contracts, with the front month closing at the lowest level since the first part of June.
The Dow Jones Industrial Average closed 632 points lower. The S&P 500 closed 95 points lower. The NASDAQ closed 465 points lower.
According to the weekly U.S. Drought Monitor (Sept. 1) 57.46% of the continental United States was classified as abnormally dry to extreme drought. That was 27.9% more than the same time last year, but 0.2% less than the prior week, with help from Hurricane Laura.
Those rains also helped pasture and range conditions hold their ground week to week, according to the latest USDA Crop Progress report for the week ending Sept. 6.
22% of pasture and range was rated in Good (20%) or Excellent (2%) condition, which was 29% less than last year. 46% was rated in Poor (27%) or Very Poor (19%) condition, compared to 20% at the same time last year.
In his weekly market comments, Derrell Peel, Extension livestock marketing specialist at Oklahoma State University points out drought is primarily in the western half of the nation.
“There is no doubt that lack of pasture is creating management challenges in the worst drought areas and likely leading to some regional destocking and relocation of cows,” Peel says. “However, it is not clear that drought has resulted in significant net herd liquidation thus far. Beef cow slaughter for the year to date is up 3.3% but is down fractionally for the past four weeks.”
But, Peel says poor pasture conditions magnify the importance of hay supplies heading into the fall and winter. USDA estimated alfalfa hay production 5.9% less year over year, in the August Crop Production report, and other hay production 0.5% less.
“The reduction in alfalfa hay production is generally more important in the northern half of the country and affects both beef and dairy cows,” Peel explains.
“In the western region, both alfalfa and other hay production are down year over year, and combined with the poor pasture conditions, suggest the biggest regional challenges in the coming months.”
Compared to the west, Peel explains pasture conditions are significantly more positive in the Corn Belt, which represents about 15% of U.S. cowherd, and where crop aftermath likely comprises a more significant component of total forage supplies.
“USDA reported July alfalfa hay prices of $174/ton, down from $179/ton in June and from $183/ton one year ago,” Peel says. “Only six states reported year-over- year higher prices in July. Other hay prices in July were $137/ton, up from $128/ton in June and higher than $134/ton last year.”