It looks like on the averages, some ground has been gained on grass cattle this week. Overall, the cash market on lightweights has strengthened compared to a relatively steady SEP 10 futures market. The cash market on the heavier weights however, seems to have retreated a bit from the SEP 10 futures setting some nice potential profits from these weight classes of cattle.
Let's take a look...
Aberdeen, SD May 12, 2010
Buy steers, medium 1 675# @ $125.00
Lock 'em in on the board for SEP 10 @ $114.92
Run on grass for 120 days @ $0.72/day
Allow $20/hd for operating costs
Sell 903# in September
Breakeven $105.22
Profit $87.57/hd less basis and commissions.
Yankton, SD May 12, 2010
Buy steers, medium 1 755# @ $121.00
Sell 959# in September
Breakeven $106.35
Profit $82.13/hd less basis and commissions.
Aberdeen, SD May 12, 2010
Buy steers, medium 1 830# @ $113.00
Sell 986# in September
Breakeven $105.91
Profit $88.81/hd less basis and commissions.
Looks to me like the heavier weight cattle are a little under valued in the market right now as opposed to last week and now might be a good time to pick some up. The opportunity to lock in reasonable profits on all weight classes looks pretty good right now.
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