Page 8 - MWC 10-21-2021s
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The Midwest Cattleman · October 21, 2021 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         There has been a recovery in pricing in the past two weeks.          January feeder futures have recovered 53% of their prior six
      December fats recovered 42% of the prior six week decline. The  week break. We find this interesting as cash sale barn prices were
      virus is still a topic of conversation but the declines in new num- stable for three weeks straight at +3%/+4% over two years ago in
      bers, in place for a month, is easing some concern over both the  the same weeks. The short term sale barn trade noted high calf
      US consumer and labor at meat plants.                                 marketings as many don’t want to risk high feeding costs. That
         General economy information is still a concern. The past two  is bearish for the coming later spring fed cattle numbers but does
        Live Cattle:  My thoughts center around this market stabilizing now.  I’ve been  not change the general narrative of coming tight supplies from
      months of lower than expected job gains are an issue. Concerns           Feeder Cattle:  All you have to do is look at the corn market for a reason for the
                                                                            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
      over a change with the Federal Reserve’s easy monetary policy  a year over year basis. USDA’s 10/12 supply/demand report still
                                                                            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
      are another. But the outside concerns don’t have to mean lower  pegs 2022 US beef production at -3.0%.
                                                                            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
      US consumer interest in beef. As a reminder, the US consum-           they’ve really had time to concentrate on buying feeders.  Let’em get caught up a
                                                                              It is the longer term situation for cow/calf producer that really
       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
                                                                            little and they’ll head to town.....checkbooks in hand....bulging with “corn” money.
      er was still increasing beef demand before the virus as well as  captures our interest. Another round of beef cow liquidation from
       for about a month.  Two weeks ago they were 8% lower than last year.  This weeks
                                                                            This market will rally....wait and see.
      through it. We expect US cattle supply to show year over year  mid-July through early September, ensures another good decline

       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  set for January 1 beef cow numbers up ahead.
      declines starting in late October and running through early Feb-
       lose some of that.  I just can’t pull the trigger yet on long term bullish hopes.
      ruary. Our target for December futures remains at $134.
                                                                                                  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’s the update on feedlot recommendations?
       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: On the 9/30 update of this publication, we suggested securing all feeder cattle needs for the next six
       going to have to kick in though in order to get it.
       months. The close on that day was 154.17 for January feeder futures. We also suggested locking in any
       corn needs for the next six months on any attempt for the December to see $5.10. That would have been
        Q #2
        Due to the recent break in feeders, would you be holding your fall-weaned
       completed on 10/13. We suggest leaving fat cattle unhedged at this time.
       calves for a while or letting them go?
       Q: When will the best pricing hit next year for fats and feeders?
       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: Feeders typically see the best pricing in July/August. We would suspect April/June in 2022. Fats
       right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
       should see a moderate seasonal rally into February but it may not last beyond that into summer. Q3 and
       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
       Q4 may be the winner next year.
       for “higher feeders” is “Hope”.
                                                                             November  6th

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                                                                              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
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                                                                              6 -    Show Steer Prospects
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