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Fed Cattle Market Struggles,
      Fed Cattle Market Struggles,                                                                    The Midwest Cattleman · April 1, 2021 · P6

      But Optimism Lies Ahead
      But Optimism Lies Ahead

                 By Derrell Peel         rest of the year.                  placements       of
            Oklahoma State University       The March Cattle on Feed        cattle under 700
                            Fed cattle  report pegs March 1 feedlot in- pounds            were
                         markets have  ventories at 12.0 million head,      down 4.5 percent
                         been unable  up 1.6 percent year over year.   year over year
                         to put togeth- February placements were  with              placement
                         er any sort of  98.1 percent of last year with     over 700 pounds
                         spring rally  winter weather reducing place- down  by  0.6  per-
                         this      year ments during the month.  Feb- cent compared to
                         with     cash ruary marketings were 97.6  last year.                                 Currently Live Cattle futures
      markets trading in a narrow  percent of one year ago also               Feedlots have been some- for April and June are trading
      range for several weeks.   The  disrupted by the massive win- what front-loaded thus far in  at roughly the same level with
      5-market fed cattle price has  ter storm in February.                 2021 which has contributed  June, at times, premium to
      averaged $113.81/cwt. for the         The cattle on feed report was  to the sluggish fed cattle mar- April.  This is unusual because
      past six weeks with weekly av- well anticipated with place- kets in the first quarter of the  June is usually at a significant
      erages ranging from $113.62/ ments, marketings and the  year.   Feedlot supplies should  discount to  April Live Cattle
      cwt. to $114.07/cwt.               on-feed total all close to pre-re- tighten in the second half of  futures.
         Fed cattle markets have  port expectations.   February  the year after working through                  In fact, the previous five-
      struggled with ample supplies  placements of cattle less than  current inventories.  However,  year average discount of June
      thus far  in  2021  aggravated  700 pounds was down 4.5 per- interpretation of cattle on feed  to April Live Cattle futures in
      by winter weather disruptions  cent year over year and cattle  reports will be difficult in the  March is -$8.47/cwt.  The fact
      in February.   Steer plus heif- placed weighing more than 700  next few months because 2021  that  April and June are at
      er slaughter is up 0.8 percent  pounds was almost unchanged,  will  be  compared  against  the  equal levels this year is due to
      year over year for the first nine  just fractionally lower than  monthly volatility in place- weak  April  prices  relative  to
      weeks of the year with steer  last year.                              ments and marketings due to  June expectations.  Live Cattle
      and heifer carcass weights 13         Feedlot supplies are expect- pandemic disruptions in 2020.  futures prices for October and
      to14 pounds heavier year over  ed to tighten in the coming              There is considerable opti- December reflect additional
      year.  Carcass weights are de- months.    Total feedlot place- mism for fed cattle markets  optimism for fed cattle mar-
      clining seasonally and relative  ments the past six months were  going forward beginning in the  kets in late 2021 and heading
      to last year and may be below  down 2.3 percent year over  second quarter and especially  into 2022.
      year ago levels for much of the  year.   In the last six months,  in the second half of the year.

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