As rains pull out of the Plains states, they leave behind farmland that remains abnormally dry. Market analysts are warning of possible yield consequences for the Hard Red Winter wheat crop from which bread is made, but the areas in question also are home to some very large pasture lands.
The combination of short soil moisture and skimpy grass availability could make it tough for cattlemen to grow livestock to the 750 to 800 pounds desired by many feedlots. It also could threaten the ability of farmers and ranchers to rebuild their cow herds, many of which were expanded slightly amid more rain and greener pastures.
The latest National Oceanic and Atmospheric Administration Drought Monitor shows the areas of greatest concern.
Water temperatures in the equatorial Pacific Ocean now are warm enough to be classified as an El Nino event, which could bring more moisture to Texas and the Midwest.
EL NINOS WEAKER
However, it is still a weak El Nino, and it didn’t occur early enough in the year to bring needed snowpack to California and Nevada mountains. The current El Nino could bring rain to these areas for as long as it lasts, which is something no one knows. Further cattle herd liquidation can be expected from these areas.
But the Plains are getting drier, and current forecasts call for only light to moderate showers for the next couple of weeks. Rain in April and May will be needed to make up for a lack of winter snow in order to make a good wheat crop.
The swath of states from Texas to North Dakota has dryness ratings from normal all the way to exceptional drought, which is the most severe rating, and this week’s showers likely did little to relieve the drought stress.
That’s because the current El Nino is a type that is concentrated in the center of the tropical Pacific Ocean and tends to flicker in strength, according to Browning Media.
“When El Ninos play peek-a-boo, so does the rain.”
CASH CATTLE MARKET REMAINS QUIET
The cash cattle market Thursday remained mostly quiet, with light trade late at $161 per cwt on a live basis, up about $1 from last week, but it was too late for the futures market. Some support may show up in early trade today.
Bids of $255 per cwt on a dressed basis were heard in Nebraska, while asking prices held around $260 to $262.
Wholesale beef prices were mixed Thursday in moderately good demand. Ribs and loins were firm to higher while chucks and rounds were weak to lower. Trimmings were lower in light demand and light-to-moderate offerings.
The USDA’s choice cutout Thursday was down $0.19 per cwt at $246.61, but select was up $0.32 at $244.79.
The choice/select spread narrowed to $1.82, and a moderate-to-heavy 119 loads were sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Wednesday was $212.61 per cwt, down $0.01 on the day. This likely was a drag on the Mar futures, which settled at $214.25, up $2.67.