The quality of the calf offerings also accounted for a percentage of their market loss as sales were mostly collected on plainer quality kinds sold in small packages that did not draw much interest.

Country buyers and sellers are currently haggling over the price for fall contracted strings of ranch calves, but sharp losses on the CME Feeder Cattle futures have made it difficult for these two parties to come together.

The Monday following June’s bearish cattle-on-feed report and record hot weekend temperatures saw new-crop corn contracts trade up the allowable 40 cent limit as feeder contracts settled down the 3.00 limit.

Perhaps this year’s drought is not getting near the publicity of the record dry spell across the Southwest a year ago.

But the lack of rain is much more wide spread and including some of the country’s most productive farm land.

Out west and in the mountain states, producers are being forced to early-wean calves and start selling-off their cow herd.

Wyoming has seen all-time record auction receipts for this time of year with a high percentage of cow/calf pairs. The lack of winter snowfall and a mostly dry spring across the Midwest has producers suffering from central Iowa down to Arkansas.

Midwestern farmers and ranchers depend on high yields and high stocking rates, while a drought is hard to overcome when it takes well over and inch of rain per week just to maintain average moisture levels.

High production areas of the Eastern Corn Belt may be the driest from Illinois to Ohio as corn plants enter the all-important silking stage with many prematurely tasseling.

The fed cattle market lost $3.00 in two consecutive weeks with sellers quick to give up market position for the multi-dollar basis premiums their hedges held to the Board.

But, by late June the mid 120.00’s market was gone and replaced by mid-teens with feedlot managers holding very little leverage to get through a rather surprising increase in the number of market-ready cattle.

Formulated sales hit an all-time high in late June making up 282,000 head of the weekly nationwide fed

cattle harvest. This allows packers a known captive supply and cattle feeders assured scheduling to better manage mandatory withdrawal periods of widely used late-term feed additives.

However, it's hard to turn a down market around when 60 percent of the cattle are selling off the high from the previous week, that only 21 percent of die-hard negotiated cash sellers are establishing.

For the balance of the summer, grain markets will completely hinge on the weather and expected performance of the unprecedented number of acres planted this year.

Feeder cattle demand will depend on expected cost-of-gains from the progressively higher corn market. Whether or not tighter supplies of fed cattle, yearling feeder cattle, or fall calves will lend enough support to stave off this summer’s cattle market free fall is anybody’s guess. 

Corbitt Wall
Missouri Federal –State Supervisor
USDA Livestock & Grain Market News