Wheat pasture has developed relatively slowly in Oklahoma this fall, despite the early potential that seemed to exist after the cool, wet August, said Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel, in the “Cow/Calf Corner” Extension newsletter.
USDA’s National Agricultural Statistics Service reported that 16% of Oklahoma wheat was planted by the last week of September, down from a five-year average of 25% for that date.
A couple of factors contributed to the delay in wheat planting, Peel said. Dry top soil developed in early to mid-September, especially across the northern and northwestern parts of the state, causing some producers to delay planting. A continuing threat from armyworms also prompted some producers to delay planting.
Most of Oklahoma, particularly in the wheat belt, has received significant rain recently, and wheat planting likely will accelerate into early October. Subsoil moisture is generally good, and established wheat should develop rapidly.
Wheat still is mostly on track for a normal beginning to wheat grazing in late November to early December, he said.
STOCKER PRICES DOWN
Stocker cattle prices in Oklahoma decreased only slightly through September, showing a less-than-seasonal price decline, Peel said. Prices have been variable from week to week with fluctuating weather conditions and futures market volatility.
September prices for stocker steers and heifers averaged 14% to 18% higher than last year despite a 20% increase in feeder cattle auction volume compared to one year ago, he said. It certainly appears that stocker demand remains strong.
The abundance of available pasture and hay, likely has supported stocker demand with continued expectations of good wheat grazing yet to come, Peel said. It appears that significant numbers of stockers are being received and started in a variety of backgrounding programs in anticipation of winter pasture.
Stocker prices may weaken seasonally with the biggest calf runs expected in the next month to six weeks but the seasonal declines may be less than typical with continued strong stocker demand, he added.
A strong rally in feeder futures since late August offers improved winter stocker profit potential. At current levels, Mar futures would allow a 750-pound steer to be priced at roughly $150 per cwt in Oklahoma.
A 475-pound steer at today’s prices, would have a March 1 breakeven of $130-$137 per cwt at 750 pounds depending on pasture and other costs. Such opportunities to price in winter stocker margins are rare and generally fleeting.
Frankly, it is hard to justify current feeder futures prices for the spring based on cattle market fundamentals, but speculative moves in futures are wildly unpredictable.
Producers should act promptly if these futures price levels are attractive, Peel said.
While no major cattle market weakness is foreseeable at this time, general expectations are for modestly lower cattle prices in 2018 on continued growth in cattle supplies and beef production.
There clearly is more downside risk than upside potential from current levels.
CATTLE, BEEF RECAP
No cattle sold Wednesday on the Livestock Exchange video auction.
Cash trade was reported late last week at $107 to $108 per cwt on a live basis, steady to $1 lower than the bulk of last week’s action. Sales in dressed markets were reported at $172, steady to up $2.
The USDA’s choice cutout Monday was up $0.60 per cwt at $197.22, while select was off $0.22 at $188.28. The choice/select spread widened to $8.94 from $8.12 with 73 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Friday was $154.30 per cwt, up $1.34. This compares with Monday’s Oct settlement of $150.35, down $1.87.