Page 8 - MWC 09-9-2021s

The Midwest Cattleman · September 9, 2021 · P8

MARKET REPORT

Live Cattle Feeder Cattle Daily

Live Cattle: Feeder Cattle:
Cattle trades this past week, $124 in the south, would be a $2 We’ve discussed the longer-term supply picture quite a bit in
gain over the prior week. Since May, prices have been locked in a recent months. But it is not over. Beef cow processing so far this
minimal $118 - $122 range that was not dependent on wholesale year has run 10% over last year in the same period. It is 13% over
beef prices. This $124 trade would be the best since April 2019. In two years ago in the same period. Larger liquidation on a smaller
our view, this is the start of the market’s moderately higher trade and smaller cow base is the message.
into Q4 and much better trade ahead for Q1. This is both due to In the short-term calf prices in the sale barn have fallen around
long term cow/calf liquidation finally catching up at the feedlot as $5 over the past three weeks. This is a normal preparation for the
well as the fact a good portion of the 2020 calf crop has already heart of the seasonal 5-weight marketing effort. Positively, this
been placed. past week’s sale is 20% over two years ago. Cash 7-weight feeders
Feeder Cattle: All you have to do is look at the corn market for a reason for the
Live Cattle: My thoughts center around this market stabilizing now. I’ve been
In the short term, live cattle futures are coming off a recent $5
placing a bullish tilt to this market for some time now. I may need to temporarily are 13% over two years ago.
pull-back in feeders. If I owned a feedlot I’d be nervous to say the least. I do feel
break. The market has reduced its estimate of the coming rally. 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
have a negative impact on prices yet, so like they say, “All good things come to those
Current futures, with an appropriate basis, are implying only gain 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
in cash cattle of $2 into October and a $7 gain into December. We they’ve really had time to concentrate on buying feeders. Let’em get caught up a
least the end of the year. Beef shipments have been lagging last years’ levels now
would feel more comfortable with October futures at $130 and De- little and they’ll head to town.....checkbooks in hand....bulging with “corn” money.
for about a month. Two weeks ago they were 8% lower than last year. This weeks
This market will rally....wait and see.
cember $135. We would be more interested in corn procurement
report showed exports a whopping 56% lower than last year. This ain’t good. Low
for the next six months at CZ prices of $5.10 than we would in live
imports and high exports have held this market up all summer. We’re starting to
cattle futures hedging.
lose some of that. I just can’t pull the trigger yet on long term bullish hopes.
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: Will the hurricane’s impact on Gulf exports keep corn prices down?
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: It is a valid contributing factor to lower pricing. We estimate it will disrupt 19 million bushels of corn
going to have to kick in though in order to get it.
exports per week, disrupt not eliminate. If exports are completely zero for four weeks, the 76-million-
Q #2
bushel impact would equal almost 40 cents in lower corn pricing.
Due to the recent break in feeders, would you be holding your fall-weaned
calves for a while or letting them go?
Q: Are you still looking for a peak in January feeders of $175?
Answer: What ever happened to the easy questions? This will depend upon your weaning sched-
A: Currently we are. The recent peak of $172 is quite close but not yet there. In our view the general
ule and your available feed supply. I’m long term bullish the feeder market but the “reality” of
supply narrative should allow the base animal to see more pricing interest. The potential of just a little
right now probably dictates letting them go. If you keep them for an extra 30 days, make sure you
lower corn pricing could also help into harvest.
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