The SEP 10 gained some ground over the last week largely due to seasonally short supplies of feeder cattle. This may result in some real values this week if you can catch the cash market asleep at the wheel. For the most part, the window to buy grass cattle is about closed with only about 90 days left in the grazing season.
However, guys may be able to pick up some really good values, especially on the heavier end of both steers and heifers, if backgrounding this fall is an option. You could lock them in the NOV 10 or JAN 11, grass them for 90 days or so, and feed them on a moderate energy diet for 45-60days and and do pretty well.
Mid- and light-weight cattle are really over valued right now for any grass activities and I would probably stay away from them. The exception might be mid-weight heifers that you can get bought right.
The heavies are a pretty good value right now, but performance on grass at this time of the year will be a problem and we don't want to rely too heavily on a background diet to put all the weight on them or your cost of gain will negate any potential profits on the turnaround. The wet, cool weather we are having right now will help, but eventually the sun will shine, the grass will start drying up, and heavier heifers will only be gaining 0.6-0.7 lbs./day at best.
Values to stay away from:
Buy steers, medium 1 594# @ $127.12
Lock 'em in on the board for SEP 10 @ $110.42
Run on grass for 90 days @ $0.72/day
Allow $20/hd for operating costs
Sell 729# in September
Profit $<34.89>/hd less basis and commissions.
Buy steers, medium 1 733# @ $117.21
Sell 841# in September
Profit $<15.27>/hd less basis and commissions.
Buy heifers, medium 1 618# @ $115.00
Sell 735# in September
Profit $16.12/hd less basis and commissions.
Values to look for:
Buy steers, medium 1 886# @ $102.5
Sell 967# in September
Profit $74.85/hd less basis and commissions.
Buy heifers, medium 1 776# @ $106.00
Sell 857# in September
Profit $38.98/hd less basis and commissions.
Buy heifers, medium 1 828# @ $100.32
Sell 891# in September
Profit $68.43/hd less basis and commissions.
I didn't include the backgrounding phase on these sets of cattle because some pretty reasonable profits can be made simply on the turnaround value of these cattle. I'll start doing the grass/backgrounding analysis next week because I expect much of the grass value in feeder cattle will have bled out of the margins by then.