- Cash Cattle last week averaged $126.66 on Steers and $126.43 on Heifers
- No cash reported yet for this week
- Choice Boxed Beef last Friday ended at $285.72 and Select at $263.37
- Last Weeks kill estimated just short of 670,000 head
The Commitment of Traders last week showed the Funds adding to their short position and decreasing their long positions on Feeder Cattle. This is not normal for them, fyi. Why would the funds be short feeder cattle in a drought, that has undoubtedly caused an increase in cow slaughter? Simple answer is CORN! This past week, Corn has put more than 70 cents. Meanwhile, fats have been a flat market. The question becomes- When do the funds flip? Feedlots need to have some sort of protection against higher feeder cattle in place. Cash feeder cattle have not been weakening through this dip in futures, which leads me to believe that the feeder cattle just arent there, and lower futures could turn soon to catch up to cash. Add in the fact that corn could find some resistance very soon, and these feeders could really jump. Be ready for that rally, especially after the puke fest that took place into the close today.
Anyone notice that the packers arent buying out a month anymore? Besides the advance last week of $2 on country cattle, sale barn cattle and quick ship cattle have advanced a bit more than that, even into this week already. Cash is king in my book, and cash is doing the work, even with the lower leverage that feed yards have. Feed yard managers are taking calls from packer buyers they havent heard from in months or more. Slaughter pace is up, while packer margins are steady. Doesnt take a genius to see the front-end cattle are not there like they want us to believe. Weights have been climbing, up until now. But I have no problem directly correlating that with optimal feeding conditions.
The cattle are doing their job. But the forecast is starting to change. Today is the start of November, and Mother Nature will soon show her ugly side. Will weights flatten as packers keep the kill numbers up and the weather turns colder? My bet is yes. All while consumers are still trying to get their hands on those middle meats. If youve been watching, the fake meat companies are going down. Consumers want the real deal, and were the only way their going to get it. It is time for the packers to Show me the Money!
66 Spayed Heifers in Nebraska last week weighed 875 and brought $151.25, returning that feedyard $109/hd with a zero basis in April and $1 Cost of Gain. Theyre out there, get your pens ready!
Looking to Trade or Hedge Cattle? Please reach out and let’s chat…
Dan Gerhold
319.320.4774
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