November Feeder Cattle Outlook – 06/06/2022

Feeder cattle prices could have considerable upside potential this summer, but only if farmers harvest a crop at least as large and preferably larger than USDA currently forecasts. As a residual claimant feeder cattle values closely follow feed grain values (negative) and finished cattle prices in a positive direction. 

Since corn prices and finished cattle values are just as difficult to forecast as feeder prices we have developed scatter studies displaying the November feeder cattle price range as a function of the US feeder cattle supply on July1.  We estimate the feeder supply on July 1, 2022 at 35.4 million head which is down about 800 thousand head from a year ago. November feeder cattle could trade above $200 hundredweight provided corn drifts to below $7.00 A full blown weather market (December corn above $9.00) could be a disaster for feeder cattle market bulls. 

Note the red point on the scatters is the intersection of our feeder cattle supply forecast and the close for November feeders on 6/6/2022.