Sort & Cull

We've spent a lot of time spotlighting the fat cattle and live cattle markets in recent weeks, but the developments in the feeder cattle market need to be addressed as well. With the bothersome regression happening in fat cattle prices, and a corn market that just doesn't seem to have a top, the feeder cattle contracts have been left high and dry with absolutely no support to sustain current price levels.

Regardless at what chart you look at, the feeder cattle contacts have taken an utter beating, and last week was especially devastating. DTN's Friday-to-Friday contract changes shared that the April feeder cattle contract fell $5.78 through the week and the May feeder cattle contract fell a sharp $6.05. Last week's surge in corn prices were largely to thank for the deterioration in the feeder cattle contracts, but looking to the weeks and months ahead, cattlemen are wondering what's next? What's the long-term trajectory?

Regardless of what corn prices did last week, what they'll do this week or what they could do in the weeks to come, every market connoisseur will tell you, "the cure for high prices is high prices." At some point, the corn market will find a top, and feedlots are praying that it's sooner rather than later. The next question then becomes, "how will the decline happen? Will corn prices drift down slowly or will they crash abruptly?"

As with all things, time is the best judge of market matters, but with how lofty these corn prices have become, even the most bullish corn analysts think a decline is on the horizon.

With spring in the air and calves bucking around pastures, a lot of cow-calf producers are starting to think about marketing their calves already. The fact that nearly all input costs (hay, grass, corn and soybeans) are all higher isn't comforting, but before you become too discouraged about marketing this upcoming calf crop, it's also important to remember that the nation's cow herd is starting to go through a liquidation cycle. Fewer cows lining the hills and plains mean that calf buyers are going to have to work a little more aggressively to secure the cattle they need.

Tune into this week's Cattle Market News Tip-Sheet on the DTN/Progressive Farmer Facebook Page or by clicking the link below. You'll find an excellent video of all the cattle market's developments last week and will understand how they could affect the market in the weeks to come. https://fb.watch/…

ShayLe Stewart can be reached at shayle.stewart@dtn.com

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