August 15, 2015 Comments are off Montana Stockgrowers Association
Share:

Cattle Futures Skeptical, Feed Costs Down, Global Trade Rocky

Drought Monitor Update August 13

Montana Drought Monitor Update, August 13, 2015.

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.

August 8, 2015 Comments are off Montana Stockgrowers Association
Share:

Hay Prices and Cattle Markets Remain Firm With Good Demand

Drought Monitor Update August 6

Montana Drought Monitor Update, August 4, 2015.

Montana Drought Monitor Update, August 6, 2015. Click image to learn more.

As can be expected this time of year, it was a pretty uneventful week on the precipitation front across most of the region, including a quiet monsoon signal across the Desert Southwest. The West remains unchanged this week but the impacts (near-record/record low streamflow, water supply, water temperatures, fire, etc.) are still being felt and are of major concern as we head toward a new water year with September now on the horizon.

For the period August 6 through August 11, monsoon precipitation will again be relatively scarce across the Desert Southwest and the rest of the West will be seasonally dry as well. One significant feature worth noting is that the 8-14 day outlook projects a stronger likelihood of above-normal temperatures across the West.

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

Montana Weekly Auction Summary for Week Ending August 7

Market: Billings Livestock, Public Auction Yards, Miles City

Receipts: 1,188; Last Week 997; Last Year NA

Compared to last report: Supply of Feeder cattle this week was very light and consisted of mostly single head lots and a few larger, good quality, groups. CME futures contract prices ended with the August contract at .95 lower to close at 214.975 and September 1.35 lower at 211.475. Throughout the week, Slaughter cows sold firm with good demand. Feeding cows and Cows returning to the country sold very light. Even though supply of Slaughter bulls increased significantly this week, Slaughter bulls sold firm with good demand. The moderate supply consisted of mostly average and high dressing bulls.

Read more from USDA’s latest Montana Weekly Auction Summary.

National Feeder & Stocker Cattle Summary – August 7

Receipts This Week:  Total 341,400 – 104,300 (Auctions); 46,700 (Direct); 190,400 (Video/Internet)

Compared to last week: calves and yearlings sold steady to 5.00 higher with instances up to 10.00 higher across the Midwest and Southern Plains. Last week’s higher fed cattle market caused feeder prices to rebound this week. Demand was good on light to moderate receipts. Cattle futures all turned green on Monday with triple-digit gains of over 3.00 on feeder cattle contracts but, failed to charge ahead the rest of the week. Monday’s rally in the futures was supported by higher fed cattle trade last Friday with ideas that a seasonal bottom has been found.

Short bought packers had some immediate needs to buy fed cattle and hopefully have found a spot where fed cattle prices want to turn around. Cattle futures seem at this time to have many traders on the sidelines taking a wait and see attitude. Feeder cattle prices pretty much are going to be driven by the fed cattle market and if fed cattle have put in a summer low, how much upside potential does the fed cattle market have? The market still needs some kind of news to bring fat cattle up to a level where feeders will make money when finished.

A strong US dollar and continuing to import beef at a good pace; are factors that have bought us to a place where we are moving meat domestically and abroad at a slower pace which has created some excess. The US Jobs report was released Friday morning showing job growth remaining steady with 215,000 jobs added a little below expectations. Signs of slack persist as unemployment remains flat at 5.3%.

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

Weekly Montana Hay Report – August 7

Compared to last week: Alfalfa sold steady to 10.00 higher. Grass sold steady. Trade for all types of hay was slow to inactive. Rain throughout the week greened pastures, making buyers less likely to seek out bailed hay. This rain also dampened second cutting forcing producers to bail wet hay. Throughout the coming week, the state is expected to experience mostly clear weather and warm temperatures.

  • Alfalfa:
    • Supreme: Small Squares, 210.00-220.00
    • Good: Large Rounds, 150.00-160.00
    • Fair: Large Squares, 115.00-140.00
  • Grass:
    • Premium: Large Squares, 125.00-140.00
    • Good: Large Squares, 100.00-120.00
  • Timothy Grass:
    • No Market Test

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

August 1, 2015 Comments are off Montana Stockgrowers Association
Share:

Rain Brings Slight Drought Relief, Hay Prices Hold Firm

Drought Monitor Update July 30

Montana Drought Monitor Update, July 30, 2015. Click image to learn more.

Frontal rains and leftover moisture from Hurricane Dolores brought above-normal precipitation to parts of California, Nevada, Montana, and the Pacific Northwest this week. The heavier rainfall amounts ranged from half an inch to 2 inches, with less than half an inch common. This is the dry season for the Far West, so even minor amounts of rain equate to well above normal.

A frontal low near the end of the week gave parts of Montana 3+ inches of rain, resulting in contraction of D0-D2 east of the Rockies. The lack of mountain snowpack has contributed to record and near-record low streamflows across much of the Pacific Northwest, with tinder-dry conditions resulting in the closing of the forests in northern Idaho.

Pasture and range conditions were rated poor to very poor across 47% of Oregon, 41% of Washington, and 14% of Idaho, which were slight increases compared to the previous week. Crop harvesting continued, and while most crops were in fair to good condition across the region, 32% of the winter wheat crop in Oregon was rated in poor to very poor condition.

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

Montana Direct Feeder Cattle Report for Week Ending July 31

Market: Billings Livestock, Public Auction Yards

Receipts: 1,225; Last Week 0; Last Year 550

Compared to last week: Downward pressure put on the feeder market due to a lack of support from Live Cattle contracts has limited demand for calves and feeders. Supply consisted of 100 percent over 600 lbs and 16 percent heifers. Steers – 925 lbs. @ $204.90 Current FOB. Heifers – 535 lbs. @ $233.00 October FOB

Read more from USDA’s latest Montana Feeders Cattle Report.

National Feeder & Stocker Cattle Summary – July 31

Receipts This Week:  Total 144,500 – 106,100 (Auctions); 36,900 (Direct); 1,500 (Video/Internet)

Compared to last week: lower prices continued in the feeder cattle markets as feeder cattle and calves traded mostly 5.00-10.00 lower. Auction receipts were mostly light this week due to the hot temperatures and high humidity causing high heat index levels of near and over 110 degrees in areas across the Midwest and Southern Plains. Receipts for the most part continue to be dominated by yearling cattle over 700 lbs which is where the best demand exists at this time. Demand remains moderate to good with best demand in the Northern Plains for yearlings.

Last week and into Monday of this week Live Cattle and Feeder Cattle contracts took a pounding as long term bulls were nowhere to be found. The cattle complex did finally pull off a positive day of trading on Tuesday with triple-digit gains that extended with modest gains into Wednesday. But, the sometimes upside potential has no sense of urgency to rally much higher anytime soon. Pretty much everybody in the industry knows expansion is well underway, but it will be over a year before many of the heifers retained will calve.

A strong US dollar and weaker export demand from the Pacific Rim countries especially Hong Kong and Japan have beef exports struggling; also beef exports to Mexico have been laboring as well. Competing meat prices are strikingly lower than year ago levels as pork prices hit their all-time highs last summer during the PEDv outbreak and chicken prices were also stronger last year. Corn crop is now rated 70% good to excellent up 1% from last week, with 78% in the silking stage. Corn prices have moved lower this week as favorable weather is in the forecast for the next week.

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

Weekly Montana Hay Report – July 31

Compared to last week: Alfalfa was steady to firm this week on increased demand across the state. Interest for all hay continues to increase as drought conditions continue across eastern and western Montana, as well as, along the highline. Hay marketed locally was steady this week, while hay to ship to dry locations pushed prices higher. Demand for alfalfa is mostly moderate and moderate to good in some drier locations.

Grass hay held steady after many farmers raised prices last week. Many parts of the state are in the middle of cutting second cutting. Drought conditions eased some this week with 35.69% of the state in Moderate to Extreme drought as of Thursday’s report. That’s a 6.62% decline from last week after spotty, light rain showers fell across the state.

  • Alfalfa:
    • Supreme: Small Squares, 200.00-210.00
    • Good: Large Squares, 150.00-200.00; Large Rounds, 150.00-160.00
    • Fair: Large Squares, 115.00-140.00
  • Grass:
    • Good: Large Rounds, 100.00
    • Large Squares, 100.00-120.00
  • Timothy Grass:
    • Premium: Small Squares, 210.00.
    • Good: Large Round, 120.00

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

July 26, 2015 Comments are off Montana Stockgrowers Association
Share:

Montana Pasture Conditions Deteriorate, Heifer Inventory Up 7 Percent

Drought Monitor Update July 23

Montana Drought Monitor Update, July 7, 2015. Click image to learn more.

Montana Drought Monitor Update, July 21, 2015. Click image to learn more.

In the Pacific Northwest, above average temperatures and precipitation deficits continue to mount across the region with growing concern about potential crop losses in central and eastern Washington. According to the NCEI climatological rankings, the contiguous U.S. average temperature for June was the second hottest in the observational record (1895–2015). On a state level, California, Idaho, Oregon, Utah, and Washington all experienced their hottest average-temperature Junes on record since 1895.

During the past week, average temperatures were below normal across much of the West with the exception of western portions of California and Oregon, eastern New Mexico, and Washington. Elsewhere, statewide reservoir storage is above average in Colorado, Idaho, Montana, and Wyoming.

The NWS WPC 7-Day Quantitative Precipitation Forecast (QPF) calls for generally dry conditions across most of the western U.S. with the exception of some modest accumulation (one-to-two inches) in northern portions of the Great Basin, northern Rockies, and North Cascades.

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

Montana Weekly Auction Summary for Week Ending July 24

Market: Billings Livestock, Public Auction Yards

Receipts: 997; Last Week 603; Last Year NA

Compared to last week: This report was not released last week due to closed markets at Billings Livestock commission and Miles City, thus no trend is available. Feeder cattle this week were mostly average to attractive quality and sold with light to moderate demand. Larger feeders coming off grass sold with the best demand as they were in light flesh and feedlot ready. Several smaller consignments of fall born un-weaned calves were offered this week with many selling at a discount to long time weaned calves.

CME futures contract prices tumbled throughout the week with the August contract down 5.875 to close at 209.775 and September down 6.40 to close at 207.625 as of Thursday night’s settlement.

Weigh-up cows sold with light demand this week on light to moderate offerings. Packer buyers were very light handed this week as they bid on cows. Large reductions in kill continue to help stabilize the cow market as harvest is currently running 4-10 percent below year ago levels. Feeding cows sold with lighter demand as well this week. There was no push from any direction and cows slid lower as a result. Quality this week was mostly average. Many cows were full and fleshy coming off grass which gave buyers another reason to pass on offerings.

Many bulls are coming off breeding season and are in very light to light flesh. Packer buyers were forced to compete with feeding bull buyers for light weight and very lightly fleshed bulls. 2-3 year old cows sold on very light demand this week for very light offerings.

Read more from USDA’s latest Montana Weekly Auction Summary.

National Feeder & Stocker Cattle Summary – July 24

Receipts This Week:  Total 162,600 – 93,700 (Auctions); 29,000 (Direct); 39,900 (Video/Internet)

Compared to last week: the downtrend continues in the feeder cattle markets as feeder cattle and calves traded unevenly steady to 5.00 lower early in the week turning mostly 7.00-10.00 lower from midweek on. Long liquidation selling and feeder cattle futures looking at sharply lower feeder cattle index pressured prices. The feeder cattle market is starting to break hard over the last several weeks and keeps buyers and sellers on the defensive and more conscious of bearish fundamentals. Prices paid for feeder cattle up till now for the most part have been very good for the backgrounder and the cow/calf man. But break evens are so distant that it’s looking impossible for any results to be positive for the cattle feeder.

Northern Livestock Video out of Billings, MT held a three-day video auction this week selling over 93,000 head of top quality feeder calves and yearlings. Some of the top prices paid included 585 head of value added (all Natural) yearling steers weighing 950 lbs sold for 230.00 for November delivery. There was near 3000 head of 900-950 lb steers averaging 910 lbs that sold with a weighted average price of 216.84 for September delivery.

Boxed-beef prices have reached their lowest levels since June 2014, as Choice product on Friday closed down 1.89 at 230.70. The market has been worried about consumer beef demand for a long time with concerns over increasing meat supplies of pork and chicken. Retail prices for June saw beef values hit an all-time high with the average price for all beef sold at retail averaging 6.11/lb.

The July 1st Cattle Inventory Report was released on Friday showing ranchers expanding the cattle herd for the first time since 2006. All cattle and calves came in at 98.4 million head, 2 percent higher than a year ago.

Highlights included:

  • Beef cows at 30.5 million head, up 3 percent from a year ago;
  • Replacement heifers were at 4.90 million head, up 7 percent;
  • Steers over 500 lbs 14.1 million head, up 3 percent.

The 2015 calf crop is expected to be 34.3 million head, up 1 percent from last year. Cattle on Feed Report was mostly neutral to slightly bearish with Cattle on Feed for July 1st at 102 percent; Placements at 101 percent were larger than expected; Marketings were at 95 percent.

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

Weekly Montana Hay Report – July 24

Compared to last week: Alfalfa was fully steady this week as market participants have set prices and began to fully establish the market. Demand for Alfalfa is mostly moderate and moderate to good in some drier locations. Farmers are continuing to hold on to hay supplies in the hopes that prices will improve as the western drought continues to creep east. Dry conditions in extreme eastern and western Montana, as well as, along the highline, have deteriorated many pasture and range conditions. This has forced some ranchers to purchase hay as a supplemental feed. Grass hay especially has benefited from this as prices edged higher this week. Many parts of the state are starting with second cutting, however rain forecasted for Sunday has some waiting until next week to cut.

  • Alfalfa:
    • Supreme: Small squares, 200.00-210.00
    • Good: Large squares, 150.00
    • Fair: Large squares, 115.00-135.00
  • Grass:
    • Good: Large Rounds, 90.00-100.00
    • Large Squares, 100.00-120.00
  • Timothy Grass:
    • Premium: Small Squares, 180.00.
    • Good: Large Round, 120.00

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

July 11, 2015 Comments are off Montana Stockgrowers Association
Share:

Extreme Drought Introduced in West, Futures Markets Struggle

Drought Monitor Update July 9

Montana Drought Monitor Update, July 7, 2015. Click image to learn more.

Montana Drought Monitor Update, July 7, 2015. Click image to learn more.

Most of the region was warm during the last week with temperatures 9-13 degrees above normal in the Pacific Northwest and 3-4 degrees above normal over most of the rest of the region. Idaho, Utah, Washington, Oregon, and California all had their warmest June ever (121 years of data) while Nevada had their second warmest, Wyoming their fourth warmest, and Montana their fifth warmest.

In Montana, D3 was introduced in the west while D2 expanded to the east. In the north central portions of Montana, D1 and D0 were expanded slightly. These changes were mainly in response to the rapid short-term degradation and the impact to agriculture in Montana.

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

Montana Weekly Auction Summary for Week Ending July 10

Market: Billings Livestock, Public Auction Yards, Miles City

Receipts: 1,679; Last Week NA; Last Year NA

Compared to last week: Due to no coverage of sales in recent weeks a market trend is not available. Feeder cattle receipts were limited this week, however attractive quality feeder cattle continue to sell with very good demand.

CME futures contract prices have struggled throughout the week. August contracts closed down 5.225 at 211.75 and September closed down 5.345 to close at 210.225 as of Thursday night’s settlement. However, the CME feeder cattle index hasn’t budged this week. The current index value is pegged at 220.39 as of Wednesday’s sales, which is a strong premium to the August CME contract.

A heavy offering of Bulls was seen this week as many ranchers are beginning to bring cull bulls to town after breeding season. With plenty of grass in central Montana many bulls were in light to moderate flesh, however eastern Montana has been very dry and with less grass to forage on many bulls in that part of the state were in very light to light flesh. A large portion of lightly fleshed bulls were being purchased to put on feed, this created an active market and good demand as feeding buyers and packer buyers sparred over offerings.

Buyers searching for breeding stock purchased 2 year olds to young age cows on light demand this week. Heiferettes and young age cows were of mostly average quality giving buyers no reason to bid aggressively. Cow/calf pairs sold on good to very good demand this week. Quality was mostly attractive with very large calves at cows sides and several offerings already exposed to bulls.

Read more from USDA’s latest Montana Weekly Auction Summary.

National Feeder & Stocker Cattle Summary – July 10

Receipts This Week:  Total 205,900 – 98,000 (Auctions); 48,800 (Direct); 59,100 (Video/Internet)

Compared to last week: a light test of feeder cattle did not quite produce the “ooohs and ahhhs” heard immediately after the 4th of July fireworks with yearling feeders trading mostly steady to instances 3.00 lower. There has been significant volatility throughout the markets over last week and this week. Cattle futures have mixed underlying fundamentals and traded with sharp triple-digit losses on Wednesday as feeder cattle contracts traded over 3.00 lower. Superior Video’s Week in the Rockies this week featured 260,000 head of calves and yearlings being sold with the final results to be out on Monday.

We are starting to see an increase in volatility in the markets which is a pretty good sign that they want to move from their current levels especially in the grains. Grains are looking to move higher as excessive amounts of moisture through the Midwest and eastern Cornbelt have in some areas seen crop conditions deteriorate over the last several weeks. No doubt the debate will start over grain numbers; how widely varying crop conditions have developed throughout many important production areas.

The cattle complex seems to want to move lower and keeps testing some overhead resistance, but last week packers scrambled to secure inventory paying higher prices and building on that support seen last week to buy fed cattle this week mostly steady on live prices ranging mostly from 150.00-152.00.

  • Auction Receipts: 98,000; Last Week: 67,000; Last Year: 190,700
    • Montana 1,700. 87% over 600 lbs. 20% heifers. Steers: Medium and Large 1 700-750 lbs (707) 244.77.
      • Direct receipts 4,000. 100% over 600 lbs. 19% heifers.

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

Weekly Montana Hay Report – July 10

Compared to last week: Most every part of the state has first cutting down and many have it in the stack. Hay quality has been less than impressive with most struggling to break 155 RFV. Very little dairy quality hay has been put up as a result. This has put heavy supplies of feeding hay on the local market and many are struggling to find a selling point. Many farmers have decided to hold on to supplies to see how dry conditions in Western and far Eastern parts of the state play out in the future. Very few reported sales were made this week as a result.

  • Alfalfa:
    • Supreme: Small squares, 200.00-210.00
    • Good: Large squares, 150.00
    • Fair: Large squares, 110.00-115.00
  • Grass:
    • Good: Large Rounds, 90.00-100.00
    • Large Squares, 100.00
    • Timothy Grass: Premium: Small Squares, 180.00.
  • Straw:
    • Large Squares and Rounds, 35.00-40.00.

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