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The Midwest Cattleman · February 25, 2021 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:
         The general narrative for cash prices in Q1 was for one of slow    Feeder Cattle:
      improvement. Expectations for better demand and lowered supply          There will be a point where high feed costs work their way into
      ahead in the summer have been stymied by excess weights in many  lower beef production ahead. The higher fat price-higher feeder
      areas. By the end of January, a processed steer weighed 2.6% over  price theory will work for the second half of the year. The positive
      last year, 2.4% for heifers. Along with larger numbers offered due to  issue of this wait as that a general consumer demand pull is ex-
      previous months of elevated placement, the $2 to $3 push in prices  pected in the months ahead.
      for year, to now $114, has been a struggle. Though the recent cold      The two to three year outlook for calf/feeder pricing remains
      snap may disrupt weight gains, it has also disrupted processing num-  positive. The 1/29 Cattle report showed lower revisions in previ-
      bers for two weeks.                                                   ously released herd numbers. The nation’s beef cow herd is at five
         As vaccination numbers increase and lockdowns decrease in the      year lows and it will take two to three years before heifer reten-
      coming weeks, we can agree with a contra-seasonal price increase
        Live Cattle:  My thoughts center around this market stabilizing now.  I’ve been  tion numbers are able to offset current still-high cow slaughter. A
                                                                               Feeder Cattle:  All you have to do is look at the corn market for a reason for the
      into April and June. Mid-summer will also be a time of declining of-  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
      fered supplies year over year due to low October/November ’20 place-  slight increase in cattle processing capacity ahead is also a factor.
       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
      ments. One change in the narrative has been that high feed costs      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
      would restrict placements and therefore fall prices would also see    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
      strong premiums. This is still not showing in the numbers. Overall,   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
      2021 will still be an improved year. Current futures prices though,   This market will rally....wait and see.

       report showed exports a whopping 56% lower than last year.  This ain’t good.  Low
      are getting a little spicy. Given high breakevens for cattle for finish-
       imports and high exports have held this market up all summer.  We’re starting to
      ing very late in the year, $129, we “should” see some pushback on
       lose some of that.  I just can’t pull the trigger yet on long term bullish hopes.
      feeding interest in the future.
                                                                                                  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 your current price outlook?
       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: April over $124 remains a good sell area given our potential pricing of $117. June over $121 may be a good
       going to have to kick in though in order to get it.
       area to hedge given our $117 expectation.
        Q #2
       Q: This last phase of the corn rally has pushed back into recent sale barn prices. What can I
        Due to the recent break in feeders, would you be holding your fall-weaned
       do to capture the most amount of money for this year’s feeder sales?
       calves for a while or letting them go?
        A: Hold those medium and lighter animals on farm through spring/early summer and focus on sales at higher
       Answer: What ever happened to the easy questions?  This will depend upon your weaning sched-
        weights assuming you have the forage.
       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
       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
       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
                                                                                                          Home: 660-277-3679 • Matt: 660-676-3788
                                                                               November 5, 2010 Sale offerings on
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                                                                                    CHB Dinner at 6:00 P.M.        • Barb: 660-676-4788
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