Page 8 - MWC 10-27-2022s
P. 8

The Midwest Cattleman · October 27, 2022 · P8


       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.                                                                  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


                                                                               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:
   3   4   5   6   7   8   9   10   11   12   13