Page 8 - MWC 2-3-2022s

The Midwest Cattleman · February 3, 2022 · P8

MARKET REPORT

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.
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 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
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