Page 8 - MWC 2-24-2022s
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The Midwest Cattleman · February 24, 2022 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         Gains of $5/cwt. have been seen since mid-January. Processing        Sale barn prices have remained quite stout this year. We are
      plant issues are back under control and recent concerns about  into the heavy part of the marketing season for 7-weight feeders
      imports of live cattle from Canada and avian flu in the US have  right now and prices are up $3 since the first week of the year.
      helped. February was already set for higher trade given a pocket  Feeders are running 20% over last year. A portion of that is obvi-
      of reasonable fed cattle numbers ahead of the spring supply flush.  ously higher corn. 5-weight calf prices are normally strong after
      There is no question about higher prices this year than last. Beef  the big fall sales push but current pricing is even better than ex-
                                                                               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
      production will decline year over year starting in the transition  pected at $15 over the first week of the year. They are now 24%
                                                                            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
      from summer to fall and the US consumer may have another light        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  over last year.
       have a negative impact on prices yet, so like they say, “All good things come to those
      demand increase in this post-virus environment.                       further.  The early corn harvest has most feeder buyers in the field and I don’t think
                                                                              Our general long term story here continues to hold. Feeder num-
       who wait”.  I see production numbers staying over last years’ levels until at the   they’ve really had time to concentrate on buying feeders.  Let’em get caught up a
         We still expect futures to see pressure in the weeks ahead. Mid- bers outside of feedlots are in tight supply given large placements
       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.
       for about a month.  Two weeks ago they were 8% lower than last year.  This weeks  in prior months. There is no help from the coming calf crop mar-
      March should be the start of a good supply increase, seasonally       This market will rally....wait and see.

      and year over year. $135 is our price for April futures, implying  ketings that start this fall. That’s another 1.2% year/year decrease
       report showed exports a whopping 56% lower than last year.  This ain’t good.  Low
       imports and high exports have held this market up all summer.  We’re starting to
      around $138 for cash mid-month.                                       there. On top of that let’s point out beef cow culling numbers are
       lose some of that.  I just can’t pull the trigger yet on long term bullish hopes.
                                                                            even higher than last year’s huge number so far.
                                                                                                  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 are feedlot recommendations ahead?
       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 have a little movement past our $142 and $138 50% sold recommendation for April and June fed
       going to have to kick in though in order to get it.
       cattle, all April – August finishers. We’d wrap up the rest at $150 and $143. This is for all April – August
        Q #2
       finishing cattle. Our prior recommended feeder cattle and corn booking recommendations turned out
        Due to the recent break in feeders, would you be holding your fall-weaned
       well. At current corn and feeder prices we are not too interested in long term upside protection.
       calves for a while or letting them go?
       Q: Is there a risk to the bullish big picture cattle expectation?
       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: There are two main risks. What if the Fed does raise interest rates too quickly? There is historical
       right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
       minimize the grain in the ration.  Grow them on good forage....”sell” $4.50 corn.  If the fat market
       recession risk here. The second is corn pricing. Though no one in the world wants to believe trend yield
       stays sluggish and corn prices don’t moderate, about the only thing you’ve got to hang your hat on
       is possible in the US this year. If it does there some moderate downside for calves and feeders.
       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
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                                                                               November 5, 2010 Sale offerings on
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