Page 8 - MWC 2-3-2022s
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The Midwest Cattleman · February 3, 2022 · P8


       Live Cattle                                                           Feeder Cattle Daily

      Live Cattle:                                                          Feeder Cattle:
         The cash cattle market is trying to recover after three prior        The long term story for 2022 – 2025 is now showing up in calf
      weeks of processing delays. Falling US virus cases are expected  and feeder pricing. Recent sale barn prices are 15% over one year
      to ease this recent concern. Cash has recently fallen to $137 and  ago. It is not just an expectation of a post-virus consumer but also
      the trade questions how much reasonable upside is set for pricing.  a supply issue ahead. Monday’s bi-annual Cattle report confirmed
      We only have February ahead as month with still-tight seasonal  the massive 2021 beef cow cull, the largest in 10 years, helped to
      supplies. Bears note high August – December feedlot placements,  bring the cow herd liquidation to now three years straight. This
        Live Cattle:  My thoughts center around this market stabilizing now.  I’ve been  decline in offered supply ahead also comes with increased beef
      +2.2% vs. one year ago, will ensure a good fed cattle supply hitting     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  packing capacity. We have one plant in expansion and four new
      the market spring through summer. This will help offset a portion     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
      of the gains expected from a post-virus economy and a still-strong  plants online in 2023 and 2024.
                                                                            further.  The early corn harvest has most feeder buyers in the field and I don’t think
       have a negative impact on prices yet, so like they say, “All good things come to those
                                                                              The 2021 calf crop was 1% smaller than 2020. Recent heavy
      US consumer.                                                          they’ve really had time to concentrate on buying feeders.  Let’em get caught up a
       who wait”.  I see production numbers staying over last years’ levels until at the
         At Allendale’s bi-annual conference, the AgLeaders Conference
       least the end of the year.  Beef shipments have been lagging last years’ levels now  placements off that smaller total crop means the available feeder
                                                                            little and they’ll head to town.....checkbooks in hand....bulging with “corn” money.
                                                                            This market will rally....wait and see.
       for about a month.  Two weeks ago they were 8% lower than last year.  This weeks
      series, we estimated cattle at $135 for April, $132 for June and  supply into fall will be tight. There is no relief after that. Another
       report showed exports a whopping 56% lower than last year.  This ain’t good.  Low

      $132 for August. Though lower than current futures, these are  transition to lower supply is coming this fall when the 2022 calf
       imports and high exports have held this market up all summer.  We’re starting to
      still well above last year’s low price in summer of $118.             crop starts to show up.
       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.                                                                  Opinions, market data, and
                                                                                                  recommendations are subject to change at any time.
       What Does this Report Mean to Me?
        Q #1
       Q: What are feedlot recommendations ahead?
       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: In prior discussions, back in September and October, we held a meaningful discussion about locking
       going to have to kick in though in order to get it.
       in all feeder cattle and corn needs for the coming six months. For feeder needs the remainder of 2022, be
       active on any price breaks to $166 via the May futures. For fats it is time to establish hedges on 50% of
        Q #2
        Due to the recent break in feeders, would you be holding your fall-weaned
       expected April – August finished cattle, April futures at $142 and June at $138.
       calves for a while or letting them go?
       Q: Will the US consumer eventually push back on high priced retail beef?
       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: Retail beef was 21% over one year ago in December. Beef demand has been quite strong through
       right now probably dictates letting them go.  If you keep them for an extra 30 days, make sure you
       minimize the grain in the ration.  Grow them on good forage....”sell” $4.50 corn.  If the fat market
       these rising prices. Beef processors may lose some hot air out of their margin but from our side, the base
       stays sluggish and corn prices don’t moderate, about the only thing you’ve got to hang your hat on
       producer, we’re only offering declining supply ahead.
       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
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                                                                                    CHB Dinner at 6:00 P.M.        • Barb: 660-676-4788
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