Page 8 - MWC 10-26-2023s
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The Midwest Cattleman · October 26, 2023 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         Fed cattle pricing in the Southern Plains has pushed back up         Cash feeder prices have fallen $19/cwt off the year’s peak post-
      to $184/$185. That is well off the $177/$178 lows in July. It is  ed just four weeks ago. The general seasonal for pricing, a peak
      quite important as this is an exact retest of the year’s peak pric- in early August then a decline into March, appears to be back on
      ing in June. Nebraska is still within $3 of testing its prior peak.  track. This year’s peak was six weeks late. A moderate rebound in
        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
       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
      Futures are priced with the belief we’ll see choppy trade near  corn pricing has been a contributing factor. We could see another
                                                                            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
      current pricing the remainder of the year.                            four weeks of general pressure still ahead. Let’s keep this decline,
       have a negative impact on prices yet, so like they say, “All good things come to those   further.  The early corn harvest has most feeder buyers in the field and I don’t think
         As discussed in the prior issue we still hold a little concern  though sharp, in perspective. Current prices are still 45% over
       who wait”.  I see production numbers staying over last years’ levels until at the   they’ve really had time to concentrate on buying feeders.  Let’em get caught up a
      about fed cattle pricing from economic factors. The market has        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  last year. Calf prices have held pricing remarkably well this fall.
      changed its view of future interest rate policy. The stock market     This market will rally....wait and see.
       for about a month.  Two weeks ago they were 8% lower than last year.  This weeks  There has been only a minimal $10/cwt. dip from the year’s highs

      has been in a downtrend for now three months. Though the very  into the year’s seasonal low in October. Current pricing is 57%
       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
      positive general supply story remains in place for beef, we could  over last year.
       lose some of that.  I just can’t pull the trigger yet on long term bullish hopes.
      see light weakness remain through next month.
                                                                                                  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: How aggressive could this corn market get?
       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: From a big picture perspective, the heavy supply narrative is still in place. Corn bulls can be happy pricing has not hit those very
       going to have to kick in though in order to get it.
       low prices implied by two billion ending stocks, $4.30 futures. Argentina has yet to see the beneficial rain pattern shift normally seen in
        Q #2
       El Nino years. The chart would allow a short term move potentially to $5.30. We would not expect prices to remain up there.
        Due to the recent break in feeders, would you be holding your fall-weaned
       calves for a while or letting them go?
       Q: Is it time to lift hedges?
       Answer: What ever happened to the easy questions?  This will depend upon your weaning sched-
       A: With the general tight supply story still involved in this year’s pricing we are a little more open to lifting hedges than in normal
       ule and your available feed supply.  I’m long term bullish the feeder market but the “reality” of
       years. Back in August we discussed a hedge for future planned sales. It put a floor in via January futures at $248 and allowed upside
       right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
       to $256. We would remove this protection if futures reach $236. Now let’s discuss the buy side. We’ve previously suggested buyers
       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
       follow the general seasonal and to hold from long term buys. The seasonal low for futures is in December. For cash it is March. If
       for “higher feeders” is “Hope”.
       we do see the January dip to $236 we would suggest all 2024 feeder needs to be fully hedged.
                                                                             November  6th

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                                                                              16 - Breeding Bulls 7 to 18 months             RH Standard Lad 0313
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                                                                                      Bred to Hereford Bulls
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