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The Midwest Cattleman · February 23, 2023 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         April and June futures are trading about $6 over what a con-         The bi-annual cow-calf survey, called the Cattle report, showed
      servative economic value measurement of $158 and $154 would  a beef cow herd on the trade expectation. At -4.4% from last year
      suggest. As noted in the last issue, in this year specifically, we  this is the lowest cow herd since 1962. As a disclaimer that does
      don’t consider premiums over economic value to be out of bounds.  not mean US beef output down to 1962 levels. The shock in that
      But the question is whether there is more upside beyond already  report was the finding that beef heifers held back for the cow herd
      seen. Recent southern cash cattle trades were at $160. Futures,  were -5.8% from last year. We just tightened up the beef produc-
      with normal basis applied, are suggesting $161 this month and  tion estimate for both 2024 and 2025. Beef cow slaughter will
                                                                               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
      $163 in two months.                                                   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  likely stabilize at last year’s high level through spring. Perhaps if
       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
         Feedlot profitability will become an issue. Managers note Oc- long term weather forecasts are right we may slightly slow culling
       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
      tober futures are implying cash cattle at $161. That is a bit under  rates later this year.
                                                                            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
      the $167 Kansas State is suggesting for breakevens at that time.      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
      Though monthly job gains in the US are still higher than ex-          This market will rally....wait and see.
       report showed exports a whopping 56% lower than last year.  This ain’t good.  Low
      pectations, the general expectation is a continued slowdown in
       imports and high exports have held this market up all summer.  We’re starting to
      activity ahead. That may limit some 2023 hopes.
       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.                                                                  Opinions, market data, and
                                                                                                  recommendations are subject to change at any time.
       What Does this Report Mean to Me?
        Q #1
       Q: Will lower corn save feedlot profitability?
       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: It needs to. We feel fed cattle will not push too much higher in the months ahead. We are hesitant to suggest feeder prices
       going to have to kick in though in order to get it.
       will see anything more than a $4 - $6 break. That leaves feed. The corn yield equation is 1) weather at the reproductive phase 2)
        Q #2
       weather just after and to a small extent 3) planting date. Long term forecasts from the Climate Prediction Center would suggest
        Due to the recent break in feeders, would you be holding your fall-weaned
       trend or near-trend corn yields. December could see $4.29 for ultimate fall lows ahead.
       calves for a while or letting them go?
       Q: If I have the moisture should I start expansion?
       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: The 10 – 12 year cattle cycle would suggest you expand at peak bearishness and contract at peak bullishness. We expect an
       right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
       ultimate peak in cattle prices in two to four years. If you have moisture be bullish but plan on trimming the herd by selling off
       minimize the grain in the ration.  Grow them on good forage....”sell” $4.50 corn.  If the fat market
       extra bred cows in the 2026-ish timeframe.
       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

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                                                                                   Sale at 12:30
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                                                                              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
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                                                                               November 5, 2010 Sale offerings on
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