Page 8 - MWC 8-11-2022s

The Midwest Cattleman · August 11, 2022 · P8

MARKET REPORT

Live Cattle Feeder Cattle Daily

Live Cattle:
The cash cattle market is nearing the end of the normal supply Feeder Cattle:
overage it sees in the summer. Prices in the past week or two in The general story for feeder and calf pricing is unchanged from
the South re-tested the year’s lows posted in June. They did not our discussions from the spring. Four years of liquidation has been
take them out though. Aggressive feedlot sales in July, 2.4% over noted for beef cows and the combined beef/dairy calf crop born
last year, helped to draw down supplies and even bring weights to in 2022 will be the smallest in seven years. Feeders are running
1 lb. under last year. That is quite a feat. The general supply story about 9% over last year and calves by 13%. Though it took a sig-
ahead is a light seasonal improvement through October then clear nificant amount of pain, four years of beef cow liquidation, we are
long-term liquidation impacts in Q4 and through 2026. Over the finally seeing the end results.
next three years we will offer the US consumer per capita supplies
even tighter than seen 2013 – 2015. 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
Long term liquidation, already long in-place, will certainly hit
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
supply. There are concerns about demand though. Two quarters of 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
lower GDP, year over year, was already confirmed. We can agree 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
who wait”. I see production numbers staying over last years’ levels until at the
consumer push-back will compress prices starting at the retail they’ve really had time to concentrate on buying feeders. Let’em get caught up a
least the end of the year. Beef shipments have been lagging last years’ levels now
end over the next nine months. But that does not mean lower live little and they’ll head to town.....checkbooks in hand....bulging with “corn” money.
for about a month. Two weeks ago they were 8% lower than last year. This weeks
This market will rally....wait and see.
animal prices (fed/feeder/calf). We have confirmation two of those
report showed exports a whopping 56% lower than last year. This ain’t good. Low
proposed new beef plants are breaking ground now. We expect the
imports and high exports have held this market up all summer. We’re starting to
live animal level to re-take lost share of the wholesale beef dollar
lose some of that. I just can’t pull the trigger yet on long term bullish hopes.
and that packers and end users will see margin tightening ahead.
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 the outlook for finished cattle?
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: We are bullish but not as much as futures. Our prices for December, February and April futures are $145, $152 and $152 at
going to have to kick in though in order to get it.
expiration. But bulls will likely overshoot the upside as we finally get past seasonally large summer supplies. We’ll start hedges
at $152, $154 and $160 respectively.
Q #2
Due to the recent break in feeders, would you be holding your fall-weaned
Q: Will the Plains problems with corn and sorghum yields this fall show up in the nationwide
calves for a while or letting them go?
feed picture?
Answer: What ever happened to the easy questions? This will depend upon your weaning sched-
A: We think it will, but eventually. In recent years, the general expectation was better yields than expected when the combines
ule and your available feed supply. I’m long term bullish the feeder market but the “reality” of
right now probably dictates letting them go. If you keep them for an extra 30 days, make sure you
rolled. In this case, we may have to wait until fall to see the true yield situation. With very good conditions in the East, we would
minimize the grain in the ration. Grow them on good forage....”sell” $4.50 corn. If the fat market
expect corn yields -3% to -5% from trend when all said and done, 172.0 – 175.6. That could support corn futures back to 650.
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