Bad advice?

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kenny thomas

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I study market trends and follow a lot of weekly sales and consider myself fairly informed about cattle prices. Myself and at least a couple others have given some bad advice this summer and fall. All indications were that the calf market was going to stay strong into 2024. A few of us commented about Livestock Risk Protection being a good thing but might not be needed from fall 2023 into the fall of 2024. Wrong, bad advice.
I have no clue why but the feeder futires market has been falling pretty much every week. Last Friday some months fell $6 to $8. Probably $12 last week
Today most months fell $6-&6.50. No clue why.
For some reason i have watched Augist 2024 closer than other months. It was up to 2.82 and maybe higher. Today it finished at 2.38. Thats .44 a lb on 7wt load lots. Thats over $320 a head.
Livestock Risk Protection would have saved $275 of that price. Im quoting thesr figures off the top of my head but it shows for a little money you could have made a lot of money.
Whats everyone's thoughts on why the futures are going down so much? It drags the small calf price down as it falls so get ready.
 
Most meats are dropping. The only thing up some are lambs and that is a rise from a drop and not near the top of the market prices.
 
Maybe just paper traders gaming the market. I posted the chart a couple weeks ago when the downturn started and it was mentioned that actual prices haven't been effected.
Much the same today at least in OKC .

OKC and many of the markets out that way are still strong. Not so here. Prices here are a dollar less than OKC. No $3 a lb calves here.
 
It seems like from December to March the 7&8 weights always fall off and the 5-6 weights will gain momentum. I'm guessing this has to do with cow/calf people pulling/weaning calves and the yearling guys buying lighter weights to turn out on wheat. I also think the feedlots have a harder time putting weight on the 8 weights in the winter. Could be wrong though 🤔

The futures market seems like a paper traders game to me. OKC prices are the real deal and rarely seem to follow the futures market. We are sure hoping prices stay strong for a few years but who knows what will happen.
 
It seems the only stock I sell for a decent price, compared to national prices, are weigh cows and bulls.
I admit that most of my calves are around 650 lbs. and a little fleshy, but with more pounds I still get a better price per head than by selling them lighter.
Back in August and September, some locally were selling truck load lots of 750 pounders very competitively, but now prices are off across the board.
It is a little discouraging to sell calves for $1.90 when similar cattle are selling for $2.30 in Missouri and Oklahoma.
Kenny, I have always found your comments on price trends informative and worth noting in regard to our central Kentucky situation.
The futures markets this year have a lot of people scratching their head. It seems some real structural changes are occurring that make any predictions of the market risky.
Personally, I do not see why we need a futures market for feeder calves. Also, LRPs may have actually hurt prices for those not involved.
 
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Computer generated trades have no feelings , they do what the numbers indicate. We are motivated by what we ''see'' which is a very narrow view.
 
Sure wish i could understand it.
I don't know what "it" is but "it" doesn't seem logical to me.
We ordered feed today and it was down from what it had been. I've always heard cheaper corn/higher cattle and higher corn/cheaper cattle, and it went about in a cycle but never hear the cycle talked about now.
And with record low cattle numbers it sure doesn't make sense
There must be external things I am not understanding like how the imports affect , but I know I don't believe a lot of the industry excuses
 
It is off some but that generally happens this time of the year. I sat through 5 hours of feeder calves and yearlings today. There wasn't any of the $3 calves but there wasn't very many of those earlier. I did see 4 weight steers sell for $2.85. And virtually everything was over $2. Any cattle selling for less than $2 a pound were pretty sorry.
 
I study market trends and follow a lot of weekly sales and consider myself fairly informed about cattle prices. Myself and at least a couple others have given some bad advice this summer and fall. All indications were that the calf market was going to stay strong into 2024. A few of us commented about Livestock Risk Protection being a good thing but might not be needed from fall 2023 into the fall of 2024. Wrong, bad advice.
I have no clue why but the feeder futires market has been falling pretty much every week. Last Friday some months fell $6 to $8. Probably $12 last week
Today most months fell $6-&6.50. No clue why.
For some reason i have watched Augist 2024 closer than other months. It was up to 2.82 and maybe higher. Today it finished at 2.38. Thats .44 a lb on 7wt load lots. Thats over $320 a head.
Livestock Risk Protection would have saved $275 of that price. Im quoting thesr figures off the top of my head but it shows for a little money you could have made a lot of money.
Whats everyone's thoughts on why the futures are going down so much? It drags the small calf price down as it falls so get ready.
Kenny hindsight is always better than foresight. I talked too many and also read and listened too many others before deciding too wean some of our calves and not sell off the cow. In the end I made the decision. No one twisted my arm. In hindsight I should of sold off the cow. We did have 5 wt bring $272.00 Tuesday. The 750 lb steers around 225.00. They still made money. We weaned more yesterday. Finishing up. If we continue to get moisture will hold them till 24. I knew the big lots were bringing in Mexican cattle. Not to the extent they did. The fact they gain slower and take up pen space longer I never considered. Also as mentioned outside forces influencing the market I didn't expect to the extent it has. Guess I was relying on low numbers. We will continue to market cattle as they are ready. That way we may hit a few lows but also a few highs. I appreciate all of those who offer their truthful opinions. What I do with the information I gather is my decision and I don't blame anyone else. I called a man this week about his opinion on selling now or holding a few weeks. He was hesitant to say anything after his earlier advice. I hope him and you continue to share your opinions. We may disagree on some things utcI respect your opinions and views.
 
General concensus here is that they will come back in the spring. I have been saying that for the last 2-3 years... I said that the heifer market was going to get high and tried to get son to keep more heifers to breed. But then the smaller sized 4-6 wts got high... and then this spring we sold all but 5 .... 17 got spayed and went to a friend in VT to feed out... he couldn't afford the steer prices. The rest were sold here local. We held the calves on the cows since we had fewer cows and plenty of pasture, until weaning later than normal. They are on feed now. The heavier weights of 6-900 are higher now although 7 wts are still an iffy thing since there are never very many around so not much demand. Buyers need to make loads and they can't do that when there aren't but a half dozen at any sale.
I still say that the prices will be good this spring. People will be wanting cattle to go to grass... and these 5-6 wts are going to be in demand... there are not going to be as m any either since so many have been sold this fall at lighter weights as farmers just cashed in and knew they didn't have the hay to carry them through the winter and hay was too expensive to buy... pastures suffered with our drought conditions... we do not have grasses that do good in the heat and dry...
I watch the futures also but have to agree that more and more I think it is more of paper traders that manage to manipulate things. It is a little unsettling that it has gotten to be so much of a traders game.
LRP would have been a smart move back when the futures prices were high, I said to son that I really thought that it would pay.... but he has not gone in that direction. I hope that the prices do good this spring.
I do not look for the prices to hold into the fall, even with reduced to levels not seen in over 60 years... between the instability in the world, and the mess our economy is in, and even with the slow in the inflation rates, people will not be able to pay the prices that the beef is going to cost. If things keep getting crazier, who knows where this country is going to be in the next year or so. Sure, things may calm down for awhile, but if we do not get back to a fundamentally functional country of right and wrong, common sense decency, and get back to people "having to work for a living" , we are going to be to the point that it won't matter because a government official is going to dictate who, what, where, when, and tell us we cannot make our own decisions and do not ask why , just do as we are told....

I am giving my opinion.... not advising anyone...
 
Of course the feedlots are operating on someone else's money. Look at what interest has done. How much does it cost to fill up a feedlot with expensive feeders and then what is the interest on that money. A single $1500 calf that is in the lot for 180 days at 8% interest is $60 just for the interest on the purchase price. Fat cattle are still selling for well over $2.00. Freight has got expensive. Calves here only go an hour or two to the feedlot. But once finished it is 4 or 5 hours to the nearest kill plant.
 

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