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The Midwest Cattleman · October 1, 2020 · P8

MARKET REPORT

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.
rnelson@allendale-inc.com 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
Auction

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
Display 3:00 P.M.
CHB Dinner at 6:00 P.M. • Barb: 660-676-4788
Call or E-Mail for Catalog Email: reynoldscattle@cvalley.net