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The Midwest Cattleman · March 10, 2022 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         The market has spent the past three weeks removing optimis-          Our optimism in the cattle market, a long term view for 2022 –
      tic price premiums for spring and summer. The trade sees con- 2025, remains well in place. If anything, at least on the supply end,
      tinued declines in wholesale beef, recent gains in cash cattle and  it has even increased. Breeding herd liquidation was high in 2021,
      rising finishing weights as moderate problems to work through.  a third year in a row. It continues currently. The first seven weeks
        Live Cattle:  My thoughts center around this market stabilizing now.  I’ve been
                                                                               Feeder Cattle:  All you have to do is look at the corn market for a reason for the
      Choice beef has fallen $39/cwt. since late January. End users are  of the new year has seen beef cow culling +18% year/year. The
       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
      showing a little interest at these lower prices but they are not  government’s current weather forecast through spring suggests
                                                                            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
       have a negative impact on prices yet, so like they say, “All good things come to those  no reason to expect that to change in the coming weeks.
      showing interest in needs past April. They are feeling confident      further.  The early corn harvest has most feeder buyers in the field and I don’t think
       who wait”.  I see production numbers staying over last years’ levels until at the
      early-summer supplies will be available. We agree with that view      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
                                                                            little and they’ll head to town.....checkbooks in hand....bulging with “corn” money.
      given strong previous August – December feedlot placements.           This market will rally....wait and see.
       for about a month.  Two weeks ago they were 8% lower than last year.  This weeks
         This recent price break in futures aligns with our big picture
       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
      view of pricing. We see $135 for April, $132 for June and $132 for
       lose some of that.  I just can’t pull the trigger yet on long term bullish hopes.
      August.  We still suggest the big prices for 2022 will show in the
      latter half of the year.
                                                                                                  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 should we do about corn pricing?
       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: Our prior recommendation in the fall, to lock in six months of corn needs would now have been depleted. We
       going to have to kick in though in order to get it.
       have no interest at all in trying to pick a top in this market. Paying 25 cents for four months of feed cost protection in
       this market is reasonable. A basic bull call spread, buying a 740 July call and selling an 840 July call would be simple
        Q #2
       with no margin calls. We would do this with the expectation it would expire worthless (insurance). In the last issue we
        Due to the recent break in feeders, would you be holding your fall-weaned
       suggested being active with long term feeder procurement on any big breaks to $166 on the May feeder contract. That
       calves for a while or letting them go?
       was reached last week. All planned feeder purchases for all of 2022 placements should have full upside projection on.
       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
       Q: How much pressure will high priced corn bring to the sale barn?
       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
       A: It is completely true that pressure has been seen in feeder cattle futures. Sale barn declines have also been seen.
       stays sluggish and corn prices don’t moderate, about the only thing you’ve got to hang your hat on
       Frankly, the declines so far have been relative moderate given the corn price concern. Annual beef production declines,
       for “higher feeders” is “Hope”.
       consumer demand still increasing and stable exports are offsets.
                                                                             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
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