This Week In Cattle

As previously suggested, both the futures and the cash feeders market have soften significantly since the first of the month. Not really surprising since the fall run on weaned calves is getting close. However, the fat market has stayed fairly strong, although the basis is getting wider by the day.

Cash steers are running wildly out of control right now as they are lined up to take advantage of the $100+ fat futures, although I suspect the cash market will respond lower this week as a correction to the losses on the feeder board last week. Cash heifers are currently priced in the money and I expect that to get even a little better this week as cash steers make their correction. We will see soon enough.

A couple of quick observations:

My pencil isn't quite sharp enough to make steers pencil right now, even with the APR 11 at $102. If a person can deliver a really reasonable cost of gain (< $0.75), the heavy end might work, otherwise they might be well advised to hold off on cash steers and see how they react to a softer feeder market and the fall run on weaned calves.

Cash heifers are looking pretty good right now. Again, keeping cost of gain under control is going to be key, but even at $0.80, heifers will pencil pretty nicely on the APR 11.

Examples:

Buy steers, medium 1, 733# @ $124.45
APR 11 @ $102.10
COG @ $0.80
Weight out: 1350#
Breakeven: $104.13
Loss: <$27.46> /head less basis and commissions

Buy steers, medium 1, 961# @ $109.13
APR 11 @ $102.10
COG @ $0.80
Weight out: 1350#
Breakeven: $100.73
Profit: $18.41/head less basis and commissions

Buy heifers, medium 1, 728# @ $109.35
APR 11 @ $102.10
COG @ $0.80
Weight out: 1350#
Breakeven: $95.82
Profit: $84.68/head less basis and commissions

Buy heifers, medium 1, 965# @ $103.77
Apr 11 @ $102.10
COG @ $0.80
Weight out: 1350#
Breakeven: $96.69
Profit: $68.96/head less basis and commissions

Thank you and Have a Great Day!!