Cash Climb 4-1-21
The grain markets took most of the headlines this week with a bullish acreage report from the USDA on Wednesday. Corn and soybeans traded limit up and made contract highs for both contracts. The swift rally came on the back of a rally already challenging cost of gains for cattle producers. Friday followed with a small correction lower keeping us guessing what the future holds. The market will be closely monitoring the rain forecasts as the subsoil moisture across the corn belt could be lacking.
Cash cattle trade was disappointing to finish the week with $188 dressed and $118 live catching most of the trade. Most producers were holding out for $120 live if they could, but eventually some started to cave into the bids. Futures prices reacted lower after the cash trade did not meet expectations. Boxed beef was trading higher again with estimate packer margins at $556/head per a source.
Cattle producers wait for more government bailout out money, and we can not seem to move the leverage needle yet. With lots of profit in beef industry, it is frustrating to see triple digit losses coming to the northern feedyards. Legislation still looms, but the uphill battle continues. On a lighter note, we are noticing an increase in heifers held back to join the cow herd. Heifer retention can help boost live cattle prices if less numbers end up on feed. Cattle on feed reports are not showing that shift yet, but I believe with less carcass weight and less numbers, we have a better chance for profit by the end of the year.
I wish you all a happy Easter and hope God blesses you in many ways. We are thankful we are forgiven in our shortcoming as He is risen. Enjoy your family and some great tasting beef.
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