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The Midwest Cattleman · October 1, 2020 · P8


        Live Cattle                                                          Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         Headed into October, we have expectations for a stronger cash        Seasonals for calf pricing are based on marketing patterns. In
      cattle market. Low placements from February through April of  this case, the fall flush of offerings has pressured prices by $19/
      this year should tighten up feed cattle offerings and allow for  cwt. over the past four weeks. Historically, holding back calf sales
      the remaining backlog of market ready cattle to be moved out.  from early October until early November nets a higher price. For
      $110 is still our target for the weeks directly ahead.                long term planning, we would still suggest moderately higher
         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
         The perception of supply does change with the new year  prices over the next three years based on industry contraction
       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
       place this on “hold” for a while.  The higher placements the last three months will  and slightly larger processing capacity.
      though. Last Friday’s Cattle on Feed report showed  August             the feeder market has overdone it to the downside and it will be tough to break it
                                                                              Feeder prices have been pressured from both rising feed prices
      placements into feedlots at 9.2% over last year. June through          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
                                                                             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
      August inflows were 7.4% over last year, +398,000 head. Q1 and  as well as concerns over fed cattle supplies ahead in Q1. There
                                                                             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
      Q2 ahead will be well-supplied and the normally strong pric- may be another $3 to $4 downside still ahead for Q1 feeder cattle
                                                                             This market will rally....wait and see.
       for about a month.  Two weeks ago they were 8% lower than last year.  This weeks
      ing at this time may be muted. Long term, we expect generally
       report showed exports a whopping 56% lower than last year.  This ain’t good.  Low  futures but the worst of downside is likely priced in.
      lower cattle numbers in the next three years, and slightly im-
       imports and high exports have held this market up all summer.  We’re starting to
       lose some of that.  I just can’t pull the trigger yet on long term bullish hopes.
      proved processing capacity, to narrow the spread between beef
      and cattle in the coming years.
                                                                                                  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: Are you recommending hedges for fed 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 not too concerned about downside potential for Q4 finishing cattle. For 2021 we would work on
       going to have to kick in though in order to get it.
       hedges at 116.50 for the February and 118.00 for the April.
         Q #2
       Q: What are some options for marketing calves this year?
        Due to the recent break in feeders, would you be holding your fall-weaned
       calves for a while or letting them go?
        A: Here are three options. 1) Holding onto those calves for another four weeks could bring an extra $52 per
       Answer: What ever happened to the easy questions?  This will depend upon your weaning sched-
        head in revenue from higher prices past early October. 2) Consider differentiating your calves through one of
       ule and your available feed supply.  I’m long term bullish the feeder market but the “reality” of
        the value-added programs. 3) Overwintering them could bring in an extra $242 in revenue per head based on
       right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
        current futures prices rather than early October sales. Pencil out the costs and see if one of these options would
       minimize the grain in the ration.  Grow them on good forage....”sell” $4.50 corn.  If the fat market
        work for you.
       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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