Cattle Markets Trending Down, Extreme Drought Expands in West

Cattle Markets Trending Down, Extreme Drought Expands in West

Drought Monitor Update August 27

Montana Drought Monitor Update, August 27, 2015. Click image to learn more.

Extreme drought continues to expand west of the Divide, now covering 18% of the state. In the northern Rockies and Pacific Northwest, the USDA Forest Service reported approximately 40 large wildfires in progress as of August 26th, as warm and very dry weather persisted.

Moderate drought (D1) was expanded across southeast portions of Idaho. The change is based on low stream flows in the Teton and Henrys Fork basins, and precipitation deficits during the last 60-90 days. Extreme drought (D3) coverage was expanded across east-central Washington, and north-central and northeastern Oregon. Some considerations in the D3 expansion across the Northwest include daily record low stream flows, short-term (2-month) Standardized Precipitation Index (SPI) values, and low precipitation amounts from June 1 – present time throughout the region. In some cases, record or near-record dryness was reported for the June 1 – present time.

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

Montana Weekly Auction Report – August 28

Market: Public Auction Yards, Miles City

Receipts: NA; Last Week NA; Last Year NA

Compared to last report: No weekly summary was posted for Montana markets this week due to light tests, however unevenly steady undertones were noticed on all yearling feeders. Feeder cattle quality was mostly average to attractive, with a few strings of very attractive offerings coming off grass. Flesh conditions were mostly very light to light today as many offerings were coming out of dry country. Demand for feeder cattle was mostly moderate, with moderate to good demand seen at times as buyers continue fight for good lightly fleshed grass cattle to fill feedlots.

Individual reports are available for Billings Livestock and Public Auction Yards.

Read more in USDA’s latest Montana Weekly Market Report.

National Feeder & Stocker Cattle Summary – August 28

Receipts This Week:  Total 372,100 – 139,000 (Auctions); 30,700 (Direct); 202,400 (Video/Internet)

Compared to last week: yearlings traded 5.00-10.00 lower with calves selling 10.00-20.00 lower, with instances 25.00-30.00 lower. Order buyers this week were extremely cautious after aggressive pressure from the Stock Market tumble and with very bearish outside markets keeping a strain on all commodity markets. This had order buyers wanting and needing to buy feeders cheaper this week. The cattle complex remains focused on the ability for outside market fundamentals to stabilize and to steady. Demand for calves was light to moderate, with best demand for yearlings; several auctions were getting ready for the “fall run” noting the arrival of new-crop bawling calves this week. With corrections coming in the feeder cattle market, this has prices retreating with pressure coming from fed cattle prices heading back to their summer lows.

Many backgrounders and cattle grazers who have held a little too long are not going to see a rally they have enjoyed in the past, as many yearling steers weighing from 850-950 lbs are trading both sides of 200.00; Prices dropping 10.00-15.00 from early summer highs. As fed cattle prices are declining, cattle feeders are adjusting what they pay for feeder cattle. So far this year, feeder cattle prices have been too high in relation to fed cattle prices and even despite lower feeder cattle prices this week demand remains good for yearlings in the Northern Plains.

Livestock markets remain vulnerable and reacted with lower prices in reaction to global financial worries mostly coming from China’s economic fears. Traders know this affects the commodity markets and as a result, funds have been mostly sellers to reduce their exposure in the commodities. The sell-off in the cattle complex is much hastier and fast paced than the rallies, just getting back to even is a big task.

Auction volume included 52% weighing over 600 lbs and 34% heifers.

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

Weekly Montana Hay Report – August 28

Compared to last week: Alfalfa was steady this week and excellent movement was seen across the state. Demand for Alfalfa was moderate this week on moderate offerings. Grass hay experienced much of the same movement volumes as alfalfa. The western half of the state continues to remain in extreme drought and this region continues to see the best demand for both grass and alfalfa. Wildfires continue to cause smoky, hazy conditions for much of the central and eastern half of the state. This has forced many producers to watch the forecast very closely as hay drying times have increased drastically.

• Alfalfa:
  • Supreme: Small Squares, 200.00-225.00
  • Good: Large Squares, 150.00-170.00
  • Fair: Large Squares, 115.00-140.00; Large Rounds, 120.00
  • Utility: Large Squares, 100.00 Old Crop
• Grass:
  • Alfalfa Mix Good: Large Rounds: 125.00
  • Good: Large Rounds, 120.00
  • Fair: Large Rounds, 100.00
  • Utility: Large Rounds, 90.00 Old Crop
• Timothy Grass:
  • Premium: Small Squares, 180.00-225.00
  • Good: Large Rounds, 120.00; Small Squares, 150.00
• Barley Straw:
  • Large Squares, 40.00-55.00

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