Page 8 - MWC 8-10-2023s

The Midwest Cattleman · August 10, 2023 · P8

MARKET REPORT

Live Cattle Feeder Cattle Daily

Live Cattle: Feeder Cattle:
Since our last conversation the market finally posted a near The normal seasonal rally in feeder prices, from March lows
term peak at $185 for the South and $189 for Nebraska in June. to August highs has been exaggerated this year. High fed cattle
The most recent week’s trade at $179 and $185 respectively is not prices, the expectation for continued supply tightening 2023-2026
that far off. These prices are 32% over last year. Based on only a and a downtrend in corn have all helped. Current prices are 40%
4% cut in production, that’s not bad at all. The trade continues over one year ago. But we are now at the point where seasonal
to hold clear support given expectations of a continued supply support turns into a seasonal peak. The same seasonal holds for
decline through 2024 and 2025. This is part of the unnaturally feeder cattle futures. September – March contracts have a typical
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
strong pricing that will continue to befuddle analysts that are annual peak on August 1. Back months typically decline until at
pull-back in feeders. If I owned a feedlot I’d be nervous to say the least. I do feel
placing a bullish tilt to this market for some time now. I may need to temporarily
used to clear cut supply, demand and pricing arguments. least December 9.
place this on “hold” for a while. The higher placements the last three months will the feeder market has overdone it to the downside and it will be tough to break it
We agree with the market’s implication that cash will trade
The beef trade is preparing for the annual flush of offered
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
sideways for a few weeks then move higher into Q4. There will weaned calves. We expect prices at the peak marketing in the
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
least the end of the year. Beef shipments have been lagging last years’ levels now
little and they’ll head to town.....checkbooks in hand....bulging with “corn” money.
be a small supply push in Q1 as recent placements were +2.7% first week of October to run 35% over last year. Our $235 estimate
This market will rally....wait and see.
for about a month. Two weeks ago they were 8% lower than last year. This weeks
and +4.6% year/year but that may be temporary in the generally for 525# calves out of Oklahoma City would be the second highest

report showed exports a whopping 56% lower than last year. This ain’t good. Low
positive 2024 year ahead.
imports and high exports have held this market up all summer. We’re starting to ever for that month, only second to $290 in 2014.
lose some of that. I just can’t pull the trigger yet on long term bullish hopes.
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.
rnelson@allendale-inc.com Opinions, market data, and
recommendations are subject to change at any time.
What Does this Report Mean to Me?
Q #1
Q: What is your view on corn?
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 has been damage to US corn yields but it won’t be enough to support prices. We need a nationwide yield hit of -12.5%
going to have to kick in though in order to get it.
from trend, 158.8 bpa, to justify $5.40 December futures. Eventual fall lows are seen anywhere from $3.70 - $4.40 depending on
yield. Buy only hand to mouth at this time.
Q #2
Due to the recent break in feeders, would you be holding your fall-weaned
Q: What is the next price for long term feeder buys?
calves for a while or letting them go?
Answer: What ever happened to the easy questions? This will depend upon your weaning sched-
A: We were fortunate at the start of this year to have recommended getting all planned 2023 feeder purchases hedged via long
ule and your available feed supply. I’m long term bullish the feeder market but the “reality” of
feeder cattle futures or calls. That worked great. We have the same plan for the next general price break for 2024 needs. The
right now probably dictates letting them go. If you keep them for an extra 30 days, make sure you
seasonal is key in our mind. We’ll hold from an official recommendation but expect $235 - $240 March and May 2024 futures in
minimize the grain in the ration. Grow them on good forage....”sell” $4.50 corn. If the fat market
two to three months.
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
Auction

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
Display 3:00 P.M.
CHB Dinner at 6:00 P.M. • Barb: 660-676-4788
Call or E-Mail for Catalog Email: reynoldscattle@cvalley.net