Given the current pasture and corn conditions, are there opportunities to price feeder cattle? one way to look at this decision is to look at the futures offer curve. Opportunities to Price Feeder Cattle Today Add this to the corn in “Good” or “Excellent” condition at 69% compared to 57% a year ago and combined there appears little reason to believe that corn yields are currently affected by the La Nina weather conditions. Fast forward one week which received additional moisture and moderating temperature and silking increased to 59% and dough to 9%. These were well below the five-year average of 54% and 7%, respectively. For example, for the week ending July 12 th, 29% of corn was silking and 3% was in the dough phase for the 18 reporting states. Although this year, the runup happened in the first few weeks of July as crop progress was behind and there was growing concerns that corn yield would be lower than expected. Corn ProgressĬorn futures generally begin their July runup in the beginning to middle of July often referred to as the “weather premium” (see Li, Hayes and Jacobs 2017). Given the operations access to pasture and feed, cow-calf operations may need to choose between selling weaned calves in the fall or potentially wintering them till January. If pasture conditions deteriorate it could force producers to make earlier marketing decisions on weaned calves. Pasture conditions are worse in Texas, Colorado, and New Mexico whereas most of the Southern and Western Cornbelt states have pasture conditions in “poor” and “very-poor” below 10%. These conditions are largely consistent with the La Nina weather pattern. Declining pasture conditions are largely the result of a drought progressing from the Southwest into the Great Plains. As of the middle of July, pasture conditions were 15% worse than the five-year average and 20% worse than 2019. The weekly US range and pasture conditions rated “poor” and “very poor” has continued to rise since late May and early June. One the primary factors to continue to watch are declining pasture conditions. Given current market conditions, producers have some options to lock in a margin. Pasture and corn progress are two factors that have the potential to push prices lower in the next coming months. For example, for the week of July 17, 2010, prices reached levels not seen since the beginning of March 2020. This article was originally published by In The Cattle Markets on July 20, 2020.įeeder cattle future price spreads across all months have recovered to near pre-COVID-19 levels as quarantine restrictions and packing plant capacity issues have been mostly sorted out.
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