Page 8 - MWC 10-27-2022s

The Midwest Cattleman · October 27, 2022 · P8

MARKET REPORT

Live Cattle Feeder Cattle Daily

Live Cattle: Feeder Cattle:
Our six week period of +4% year/year cattle kills ended in Sep- While fat cattle prices were a winner this past week feeders
tember. The trade is now seeing a transition down to +1% to +2% floundered. One month ago, good looking 725# steers were run-
and is preparing for numbers even with last year next month. ning 17% over last year. They have slipped to 10% over. If we fol-
Along with that the seasonal rebound for wholesale beef, based low seasonals then we’ll continue to fall in flat price through the
on procurement ahead of the holidays, will add support into early end of the year as we approach their main marketing season. The
November. This transition has enabled cash trades to $148 in the seasonal for feeder futures is declines lasting until December 9.
South. That is the best pricing since July 2015. Bears suggest dry conditions will mean continued active market-
We do need to reign in expectations for pricing in the months ings to the sale barn. Recession talk is an additional concern. Bulls
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 point out we’re also going to start a multi-year decline in offerings
ahead though. Six prior months of placements -0.6% year/year pull-back in feeders. If I owned a feedlot I’d be nervous to say the least. I do feel
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
insure adequate fed cattle supplies through Q1. The period soon regardless of drought. Calves have yet to post a clear low.
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
who wait”. I see production numbers staying over last years’ levels until at the Seasonally they should have done it two weeks ago. We see cur-
where we agree with supply bulls is Q2 and beyond. So far, we they’ve really had time to concentrate on buying feeders. Let’em get caught up a
little and they’ll head to town.....checkbooks in hand....bulging with “corn” money.
have seen moderate push-back from consumers but no major re- rent prices at a value, only 7% over last year.
least the end of the year. Beef shipments have been lagging last years’ levels now
for about a month. Two weeks ago they were 8% lower than last year. This weeks
cession scares in a major way. This is still a significant concern This market will rally....wait and see.
report showed exports a whopping 56% lower than last year. This ain’t good. Low

as the Federal Reserve has two interest rate rises coming in the
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.
next two months.
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: What is the recommendation for feedlots?
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: Future fed cattle sales should be protected with that three position strategy discussed in prior issues. A floor of protection
going to have to kick in though in order to get it.
is laid out from $154 February down to $146. It also allows for full upside participation until $166 February. This is the period
Q #2
where this is still downside potential. Given demand issues we are not focused on corn upside risk right now. As with our last
Due to the recent break in feeders, would you be holding your fall-weaned
discussion on 10/6 our primary focus right now is locking in all planned 2023 feeder purchases.
calves for a while or letting them go?
Q: Are you lifting price protection on those planned Q1 feeder marketings?
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: Yes. Normally we are a little resistant to lifting hedges. After the sharp price drop and with the long term supply story ahead we
right now probably dictates letting them go. If you keep them for an extra 30 days, make sure you
would do so. Back in August a floor in January futures was placed at $190 using a three position strategy.
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
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