Page 8 - MWC 4-21-2022s
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The Midwest Cattleman · April 21, 2022 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         After five weeks in a row, locked at generally $138 live trade       This corn market, which has yet to find a stopping point, has
      via the South, a bounce was seen last week. Beef processors, pre- brought disorder to feeder and calf pricing. We are still holding
      paring for spring demand and a moderate recovery in beef prices,  clear premiums to last year’s pricing in the sale barn. Feeders are
      stretched out for cash cattle in a moderate way. We are not opti- running +5% and calves +12%. But this feed rally has certainly
      mistic for this to last too much longer. Supplies of finished cattle  held back much of what this market could be doing. But the story
      generally increase into summer from here on out. If we have a tra- is not over as cow/calf producers continue to liquidate for now four
      ditional 10% break from spring cash cattle highs then $125 would  years. Beef cow slaughter in the prior four weeks has run 20% over
      be a target for later this summer. Given the placement numbers  last year’s heavy pace with continued drought in the Plains.
      last year, the heaviest numbers will be coming around July. Also
      of interest, weights remain about 1% over last year’s record. We
      continue to hold $132 targets for June and August futures.               Feeder Cattle:  All you have to do is look at the corn market for a reason for the
        Live Cattle:  My thoughts center around this market stabilizing now.  I’ve been
         This Friday’s 4/22 monthly Cattle on Feed should provide some
       placing a bullish tilt to this market for some time now.  I may need to temporarily   pull-back in feeders. If I owned a feedlot I’d be nervous to say the least.  I do feel
       place this on “hold” for a while.  The higher placements the last three months will
      positive longer term news. We expect March feedlot placements         the feeder market has overdone it to the downside and it will be tough to break it
                                                                            further.  The early corn harvest has most feeder buyers in the field and I don’t think
       have a negative impact on prices yet, so like they say, “All good things come to those
      -7.4% from one year ago. After heavy placements since July of last    they’ve really had time to concentrate on buying feeders.  Let’em get caught up a
       who wait”.  I see production numbers staying over last years’ levels until at the
      year, available feeder cattle numbers, depending on heifer move-      little and they’ll head to town.....checkbooks in hand....bulging with “corn” money.
       least the end of the year.  Beef shipments have been lagging last years’ levels now
       for about a month.  Two weeks ago they were 8% lower than last year.  This weeks
      ments, should show year over year declines in the months ahead.       This market will rally....wait and see.

       report showed exports a whopping 56% lower than last year.  This ain’t good.  Low
      This may be the start of a low supply period starting late Q3 and
       imports and high exports have held this market up all summer.  We’re starting to
      running through Q1. We are monitoring the discussion of a poten-
       lose some of that.  I just can’t pull the trigger yet on long term bullish hopes.
      tial recession next year.
                                                                                                  Trading commodity futures involves substantial risk of loss
                                                                                                  and my not be suitable for all investors.  The recommendations
       Rich Nelson                                                                                express opinions of the author.  The information they contain is
       Allendale Inc.                             Allendale Inc.                                  obtained from sources believed reliable, but is in no way guaran-
       815-578-6161                                                                               teed.  The author may have positions in the markets mentioned
                                                                                                  including at times positions contrary to the advice quoted herein.                                                                  Opinions, market data, and
                                                                                                  recommendations are subject to change at any time.
       What Does this Report Mean to Me?
        Q #1
       Q: Are there any new plans for feedlot recommendations?
       What do you think the price of fats will be in April 2011
       Answer: It’s hard to see the forest for the trees here, but peering through the foliage I see $105.00 fats on the horizon for April.  Demand is
       A: There is no change in the advice. If the August fed contract offers $140, we would lock in summer fat cattle offerings. We
       going to have to kick in though in order to get it.
       are not messing around with the big unknowns of corn or feeder pricing. From prior issues we discussed locking in all corn needs
        Q #2
       through June via a July 740/840 call spread. All future feeder purchases are hedged at $166 via the May contract.
        Due to the recent break in feeders, would you be holding your fall-weaned
       Q: Did the Prospective Plantings report change the forage and corn narrative?
       calves for a while or letting them go?
       Answer: What ever happened to the easy questions?  This will depend upon your weaning sched-
       A: Producers told USDA they planned to cut hay acreage again, this time by 400,000 acres to 50.332 million. That is down 8%
       ule and your available feed supply.  I’m long term bullish the feeder market but the “reality” of
       from ten years ago. The 3.9 million acre decline in intended corn planting, along with concerns over weather and fertilizer, have
       right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
       opened the upside in corn pricing. Trend yields would suggest 600 for December futures. On the other hand, a 10% cut from trend
       minimize the grain in the ration.  Grow them on good forage....”sell” $4.50 corn.  If the fat market
       would imply 840.
       stays sluggish and corn prices don’t moderate, about the only thing you’ve got to hang your hat on
       for “higher feeders” is “Hope”.
                                                                             November  6th

                                                                               Lunch at 11:00 a.m.

                                                                                   Sale at 12:30
                                                                                      Sale Offering
                                                                              16 - 2010 Heifer Calves Jan. - May
                                                                              16 - Breeding Bulls 7 to 18 months             RH Standard Lad 0313
                                                                              16 - Spring Calving Bred Females                Solid As A Rock Sire Group
                                                                              16 - Spring Calving Black Females  Reynolds Herefords
                                                                                      Bred to Hereford Bulls
                                                                              8 -    Fall Calving Pairs          1071 County Road 1231
                                                                              6 -    Show Steer Prospects
                                                                              Both Horned & Polled Offered        Huntsville, MO 65259
                                                                                                          Home: 660-277-3679 • Matt: 660-676-3788
                                                                               November 5, 2010 Sale offerings on
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