Cattle Futures Skeptical, Feed Costs Down, Global Trade Rocky

Cattle Futures Skeptical, Feed Costs Down, Global Trade Rocky

Drought Monitor Update August 13

Montana Drought Monitor Update, August 13, 2015. Click image to learn more.

Extreme drought continues to hold its grip on portions of far Western Montana where fire danger remains immediate concern. Cooler than normal temperatures dominated the west this last week. Most areas were normal to 5 degrees below normal for the week, followed by much warmer temperatures this week.

In Washington and Oregon, D3 conditions were pushed to the west as low flows on rivers and streams and warm water temperatures are impacting the region. In Idaho, D3 was expanded in the northern portion of the state where conditions continue to worsen.

The high plains and northern Rocky Mountains look to be 3-6 degrees below normal during the next week.

View the most current Montana conditions from the U.S. Drought Monitor.

Montana Direct Feeder Cattle Summary for Week Ending August 14

Receipts: 765; Last Week 200; Last Year 0

Compared to last report: Not enough comparable sales on feeder steers or heifers for a market trend. Supply consisted of 100 percent over 600 lbs and 33% heifers. Steers: Medium and Large 1 Current 900 lbs 207.80; Sep 835 lbs 213.30. Heifers: Medium and Large 1 Sep 850 lbs 203.00.

Read more from USDA’s latest Montana Direct Feeder Cattle Summary.

National Feeder & Stocker Cattle Summary – August 14

Receipts This Week:  Total 229,700 – 129,900 (Auctions); 53,100 (Direct); 46,700 (Video/Internet)

Compared to last week: yearling feeder cattle sold steady to 3.00 higher while calves traded on a lighter test traded steady to 5.00 higher. Several auctions on yearling feeders noted full advance on the heifers. Direct trade was fully steady with last week. Yearling demand continues to be best in the high corn production areas especially in the North Central States as farmer feeders are also engaged in purchasing yearlings to feed. Last Friday packers bid aggressively on tight fed cattle supplies ranging from 150.00-153.00 for live prices. Signs of beef demand improving with seasonal strength has packers selling product higher and managing their kill levels has them operating more positive to the black.

This week saw some wild shifts in the commodity markets starting with the USDA Crop Report on Wednesday. USDA’s Crop Report on Wednesday saw larger than expected corn and soybean estimates than trade expected. This should be welcome news for livestock producers as feed cost should remain relatively low and support expansion in beef, pork and poultry. The protein pipeline is putting out a good amount of product from all three species involved.

There have been some significant challenges over the last several months and of late as on Tuesday China devalued their currency over slumping economy in the world’s second largest economy. This sent the Dow in a sell-off mood on Tuesday along with wide spread commodity pressure as other world countries feeling it could get harder to sell their goods and products to China. A continuing strong dollar relative to other currencies has other countries buying less as it puts a decline in their purchasing power. Increasing production and competition from pork and poultry may have some challenges for beef domestically and abroad.

Feeder Cattle contracts want to anticipate better news especially in the fed cattle market but seem skeptical to participate. On Wednesday Feeder cattle futures had gains of near 2.50 with sharply lower corn contracts, but live cattle contracts eroded with sharp losses and support for feeders quickly faded and were unable to hold strong midday gains. But feeder cattle prices this week and last week reported through the auctions and video sales are much more resilient than the cattle futures.

Read more from the USDA’s latest National Feeder & Stocker Cattle Summary.

Weekly Montana Hay Report – August 14

Compared to last week: Alfalfa sold steady to 10.00 lower. No comparison for Grass hay or Timothy grass. Trade for all types of hay was slow to inactive. Rain was still pervasive throughout the week which impeded hay making. What hay did get made is poor quality. Throughout the coming week, the state is expected to experience mostly warm temperatures with intermittent clouds.

• Alfalfa:
  • Supreme: Small Squares, 200.00-210.00
  • Good: Large Rounds, 150.75-155.00
• Grass:
  • Good: Large Squares, 140.00
• Timothy Grass:
  • Premium: Small Squares, 180.00-210.00

Read more from the USDA’s latest Weekly Montana Hay Report.