- Cash Cattle last week averaged $124 across steers and heifers in the 5 area 80%+ Choice
- Cash Trade yesterday called steady, with the South/North spread coming together for a fair amount sold between $123 & $125
- Choice Boxed beef ended 9/22/21 at $307.83 with Select ending at $275.50
- Slaughter came in just under the coveted 660,000 head last week, after a revision.
- Weights dancing down last week, and back up this week. Following 5 year trend higher
- Cattle on Feed tomorrow. On feed, Placements, and Marketings estimates are all averaging below 100% of August last year
Ever what?
With a bit of research, after hearing of the issues in China, we learned Evergrande is not the ship that ran ashore in the Suez Canal. In fact, it is a much bigger deal. Evergrande, for those who dont know is a Chinese real estate and development company that is in very serious financial trouble. I have read that they employ more than 200,000 people and are involved in Theme Parks, Soccer Teams and Stadiums, Food and Drink businesses, and even invested in auto manufacturing. But most of their interests revolve around the Chinese housing markets. What does this have to do with us, or selling livestock? Pretty obvious that our markets are more global now than ever before? If Chinas economy struggles to pick up the pieces here, how many other countries or companies could be affected by this? Is this the first domino? This is something to be mindful of going into 2022, especially given our current price levels.
Source: QST
The chart above shows that November feeder cattle have experienced the same pain during this Septembers sell off. In fact, I would argue that we had to take this dip just to fully fill that gap left from mid-June. Now filled, we can go visit our old highs, right? The cash feeder cattle market is making a come-back. The optimism in the spring feeder market is absolutely insane. Some of these weaned 5 weight steers are bringing spring grass price. If you are buying these light calves to turn into spring yearlings, please look at some protection. January through April is rough on backgrounders, as the market loves to visit that $130 area. If youre paying $2 for a 500 pound steer, and March yearlings go to $140, your tail is likely between your legs when you inform the wife and banker of the loss.
Once again, Id like to feature a quote on some cattle that work in the current markets. I was just offered this load of steers, right off grass that could be in your yard by tomorrow. Run your numbers and tell me how these heavy yearlings dont work at the moment. Cuz they look better than those bawling calves right now. Theyre out there, just need to find them.
56 Head of 925# Steers at $1.51 Returns $96/HD
Looking to Trade or Hedge Cattle? Please reach out and let’s chat…
Dan Gerhold
319.320.4774
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