Page 6 - MWC 04-01-2021s

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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