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The Midwest Cattleman · April 22, 2021 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         Cash cattle prices pushed to $120/$121 last week. This is the best   The recent push in corn pricing has pressured feeder cattle fu-
      cash trade since February of last year. The contra-seasonal move  tures by $8 in just five days. We still suggest one more leg up for
      from late winter into early summer is based on the still-in-place  cash cattle in a month or so which comes in addition to tight feeder
      expectation of an economic rebound. March employment data, and  supplies in the coming months. Sep ’19 – Feb ’20 feedlot placements
      recent weekly jobless claims reports still suggest that narrative is  were equal with the same period two years ago. However, the 2020
      in place. Given the recent rally in cash we would suggest a $120 -       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  calf crop was counted 1.4% under two years ago. There will be a
       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
      $122 trade may be about all we can hope for in the near term. It will  perceived tightening of supply up ahead. This is in addition to corn
                                                                            the feeder market has overdone it to the downside and it will be tough to break it
       place this on “hold” for a while.  The higher placements the last three months will
      not be until be until mid-summer that the perceived demand pull is  vs. cattle price discussions.
       have a negative impact on prices yet, so like they say, “All good things come to those
                                                                            further.  The early corn harvest has most feeder buyers in the field and I don’t think
      also joined by a temporary supply dip due to low October/November     they’ve really had time to concentrate on buying feeders.  Let’em get caught up a
                                                                              Though we do not forecast a major change for general feed prices
       who wait”.  I see production numbers staying over last years’ levels until at the
      placements.                                                           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  over the next year we can suggest a stronger pull on calf and feeder
       for about a month.  Two weeks ago they were 8% lower than last year.  This weeks  prices in the months ahead.
         Our forecasts remain in place here. We still expect June and
                                                                            This market will rally....wait and see.
       report showed exports a whopping 56% lower than last year.  This ain’t good.  Low
      August to  hold  above  our  $117  economic  value  price. The  recent
       imports and high exports have held this market up all summer.  We’re starting to
      move down to $119/$120 for those contracts may be the lower end of
       lose some of that.  I just can’t pull the trigger yet on long term bullish hopes.
      reasonable pricing. October and December are seen with economic
      value at $123 and $125.
                                                                                                  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: What is the outlook for corn?
       What do you think the price of fats will be in April 2011
       A: The market continues to price old crop as though demand increases are still in place for exports
       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
       and corn for ethanol. New crop though has the greatest upside if early planting is not confirmed. The
       going to have to kick in though in order to get it.
       December could see $5.45 with a normal planting. If the summer forecast holds, that of dryness from
        Q #2
       Nebraska though North Dakota, then further upside could be seen. On the feeder end we would still
        Due to the recent break in feeders, would you be holding your fall-weaned
       recommend holding that $146/$156 May feeder cattle call spread discussed earlier.
       calves for a while or letting them go?
       Q: What did the 3/31 Prospective Planting suggest about forage this year?
       Answer: What ever happened to the easy questions?  This will depend upon your weaning sched-
       ule and your available feed supply.  I’m long term bullish the feeder market but the “reality” of
       A: In addition to drought in much of the Plains, high grain prices continue the general decline in all-hay
       right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
       acreage. For 2021 all-hay ground was seen declining 524,000 acres to 51.714 million. That is 6% lower
       minimize the grain in the ration.  Grow them on good forage....”sell” $4.50 corn.  If the fat market
       stays sluggish and corn prices don’t moderate, about the only thing you’ve got to hang your hat on
       than 10 years ago. In the last issue we expected perhaps a 200,000 acre decline.
       for “higher feeders” is “Hope”.
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