CALF_News_August_September_2019

10 CALF News • August | September 2019 • www.calfnews.net Corn’s the key December corn futures opened July 15 at about $4.60/bu. In mid-May they were about $3.70 before climbing as high as $4.70-plus in mid-June and sliding to $4.20 on July 2. Volatility was raising its head. When talking corn prices, a lot will depend on U.S. and China trade nego- tiations, which are anybody’s guess.“At the moment [ July 15] I am bullish corn,” Nemenoff says.“The July 11 crop report was essentially negative, showing ending stocks higher than expected. “The first reaction was to break to new daily lows. But within two min- utes the market started moving higher, ending the session with about an 8¢ gain. I expect December corn to be in the range of $4.30-$4.80/bu. Of course, if the trade conflict with China finds resolution, we could go above $5. Late planting and lower yields should support corn prices.” Keeling says that, along with the higher corn carryout, the July world agri- cultural supply and demand estimates (WASDE) report kept projected corn yields nationally at 166 bu./acre.“Corn and corn basis will be extremely vola- tile. It could be out of hand for a year,” Keeling says.“The cost to get corn to feedyards in Hereford, Texas, as opposed to Omaha or Garden City, Kan., will be extremely volatile. “Northern feeding areas have an advantage with higher quality cattle. The market is setting up against a southern calf, which would face more stress and higher risk from shipping long distances.” Anderson says he doesn’t feel “as pes- simistic about corn prices” as the futures market might indicate.“One role of the futures is to get folks to plant more acres and take a chance on planting even if it’s late,” he explains.“One reason for my optimism is that I would rather have it too wet than too dry. The moisture should allow for the acres planted to have adequate moisture to do well. “I think we have planted fewer acres than were expected back in March. In the bigger picture, prices were below production costs for a lot or maybe even most corn farmers. So somehow, we were likely to see fewer acres planted longer term. “I think a little improvement in the corn picture gives us a chance to rebound calf prices. How that [corn price] develops the rest of the growing season I think is the biggest factor on the calf and feeder side of the market. I think demand has continued to be good and that’s a tremendous positive.” Anderson adds that the wheat-corn price relationship could influence cost of gain.“We’ve had wheat prices below corn prices for a good bit now,” he says. CATTLE MARKETING Continued from page 9 Cattle put together at a sale or that faced long travel may have stronger basis pressure this fall and winter. “That might provide opportunities to feed wheat. I know that brings a bunch of other issues like changing rations, bal- ancing for wheat, etc., but it still might be a chance to maybe cheapen gains a little bit.” Pulling the trigger Price volatility should present some spikes in cattle prices that shouldn't be ignored.“If the opportunity presents itself to lock in a good fed price, don’t let it pass,” Anderson says.“Lately there has been some potential for prices to increase. Cattle weights are under control, which is positive, and underlying demand is good. “Also, much of the increase in beef production is from cows, so we don’t have the growth from the steer and heifer side. That lends the opportunity for continued support for fed cattle prices.”  There’s never any guarantee on cattle prices. And several cattle economists and market analysts see more price volatility this fall and winter.