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The Midwest Cattleman · September 10, 2020 · P8


        Live Cattle                                                          Feeder Cattle Daily

       Live Cattle:                                                         Feeder Cattle:
         This September is a tough month for fed cattle pricing. Pack-         If seasonals hold, we have two more weeks before the peak of
       ers have a good deal of Sep/early Oct needs met and are now  the calf sales are seen in the sale barn. Current calf prices at $160
       adding in bigger discounts for heavier cattle. Cash has recently  are running $15 over last year’s Holcomb plant fire level. Given
       fallen from the $106/$107 top down to $102. On the positive side,  this year’s slightly lower calf crop we may see that area hold.
       October and November are when those lighter spring place- Given continued light contraction in this side of the industry we
       ments will be felt. We should get the current backlog in numbers  may see fall prices back to $175 in three years.
                                                                               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
       cleaned up in a few weeks. This also brings our expectation of        pull-back in feeders. If I owned a feedlot I’d be nervous to say the least.  I do feel
                                                                               There are now two new (small) beef plants on the books. This
        placing a bullish tilt to this market for some time now.  I may need to temporarily
       rebound back to $110 in later October into focus.                    comes at a time when a light liquidation in the cow/calf sector
        place this on “hold” for a while.  The higher placements the last three months will
                                                                             the feeder market has overdone it to the downside and it will be tough to break it
         For  2021  we  are  slightly optimistic for  cattle  feeding.  We  continues. Going against the Cattle Cycle, expanding while your
        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
                                                                             they’ve really had time to concentrate on buying feeders.  Let’em get caught up a
       should begin to claw back a portion of that lost portion of the re- neighbors are liquidating, is a long known strategy.
        least the end of the year.  Beef shipments have been lagging last years’ levels now
       tail dollar that packers gained starting in 2018. Two new small       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.
       plants are in the planning stage and we will be offered a slightly
        report showed exports a whopping 56% lower than last year.  This ain’t good.  Low
       fewer calves to feed. One other issue to note, the general breed-
        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.
       ing herd liquidation in hogs could reduce competition at the
       meat counter starting next spring.
                                                                                                   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 will Q1 fat cattle prices shape up?
        What do you think the price of fats will be in April 2011
        A: Higher placements in June, July and now August will insure February has just a few more numbers than this year’s February.
        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
        That is why we see a $114 price in February compared with this year’s $119. Positively, this market is currently under that target
        going to have to kick in though in order to get it.
        due to the short term September over-supply.
         Q #2
         Due to the recent break in feeders, would you be holding your fall-weaned
        Q: What is the outlook for holding onto fall calves rather than October sales?
        calves for a while or letting them go?
        A: Over the past 10 years overwintering a 550 lb. October calf to a 750 lb. March feeder has brought anywhere from -$22 to
        Answer: What ever happened to the easy questions?  This will depend upon your weaning sched-
        +$364 per head in extra revenue, no costs included at all. Hedging the March ’21 feeder contract could lock in extra revenue of
        ule and your available feed supply.  I’m long term bullish the feeder market but the “reality” of
        $130 per head this year. That is better than the +$84 and +$92 in the two prior years. This year’s implied revenue increase, if you
        right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
        lock in feeder prices, would be better than 6 of those past 10 years. If it covers costs for your operation, it looks fine.
        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
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