Severe Drought Moves In, Sparks Fly in Cattle and Grain Futures

Severe Drought Moves In, Sparks Fly in Cattle and Grain Futures

Montana Drought Monitor Update, July 2, 2015. Click image to learn more.

Drought Monitor Update July 2

A  strong ridge over the west and a deep trough over the east dominated the weather this past week. Record high temperatures were recorded over much of the west, with many locations reaching temperatures in the 110 degree range during the week. The heat along with very dry conditions over the last 30 days has elevated the fire risk over much of the west.

Record heat and dryness over the region this week as well as over the last month has quickly deteriorated conditions in many areas after a wet May. A large degradation of drought in Montana was made this week with a full category change in the areas of western and north central Montana.

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

National Feeder & Stocker Cattle Summary – Week Ending July 3

Receipts This Week: 127,900 Total – 67,000 (Auctions); 28,600 (Direct); 32,300 (Video/Internet)

Compared to last week: there was some early fireworks show on this holiday shortened week with a volatile ride in the cattle futures and major moves in the grain trade. Several auctions held special yearling sales this week.

Cattle futures posted a strong rally on Wednesday after “Gloom and Doom” on Tuesday with Live Cattle contracts limit higher and Feeder Cattle contracts getting back most their limit losses from the day before as order buyers received a green light to do business.

The spark that got the fireworks started was USDA’s Grain Stocks Report on Tuesday with all grains trading sharply higher with September corn trading 30 cents higher, August soybeans 55 cents higher and wheat ranging from 28-32 cents higher. Corn stocks came in under average estimates of 4.555 bb fell to 4.465 bb with estimated corn acres at 88.9 million acres, about 2 percent lower than last year’s planted acres. This would be the lowest planted corn acres since 2010 and the thought that a “big crop could get smaller” shook the confidence of the bear. Corn stocks are not in a tight situation but the market is becoming somewhat nervous due to the wet weather problems across the Midwest. This summer has seen some of the highest rainfall totals on record in key growing states potentially drowning out production.

• Auction Receipts: 67,000; Last Week: 130,100; Last Year: N/A
  • Montana Not enough feeder cattle sales to report
  • Superior Livestock Video – 18,000; 42% over 600 lbs., 41% heifers.
    • Steers: Medium and Large 1 Current few load 775 lbs 233.00; few load 800 lbs 230.00; load 875 lbs 217.50.
    • Heifers: Medium and Large 1 Current 750-800 lbs (765) 218.70; Jul load 765 lbs 210.50; Aug few loads 765 lbs 207.00.

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

Weekly Montana Hay Report – July 3, 2015

Compared to last week: Trade activity is slow on light demand. Warmer, drier conditions are improving demand from the Northwest region of the state and the ability to put up higher quality hay in other areas.

• Alfalfa:
  • Good: Large squares, 150.00; Round bales
• Alfalfa/Grass
  • Fair: Round, 110.00
• Grass:
  • Premium: Small squares, 180.00
  • Good: Round bales, 100.00

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