Varilek’s Cattle Call: Battle over Mexican cattle

Friday was a great finish after a volatile week of cattle futures.  Pressure Thursday was erased after nothing was clarified on opening the United States border for Mexican cattle imports. Thursday’s down was penciling in a possible opening plan for feeder shipments. The official press conference from Secretary Rollins only unveiled plans of a new facility in Texas to produce more sterile flies to battle New World Screwworm. Nothing was mentioned on a time table for the border opening, and futures quickly recovered the previous days losses. There was a lot of anticipation wrapped up around the announcement. It did make me feel good that nobody major appeared to have the news before the official announcement.

President Trump does want more production in the United States rather than out-sourcing to other countries. That can stand for feeder cattle as well.  The health of the American cow calf producer is important too. The biggest losers are the Texas cattle feeders that rely on cheap Mexican cattle to fill their yards. It is a battle amongst the Texas cattle feeders and cow calf associations over the closed border. 

Volatility has never been higher in cattle futures. New highs could be tested first thing Monday morning. Cash feeders remain high, and live cattle prices are maintaining a good level above $240.  Seasonals have not been in the lead, but we are at a junction where they might not help for a minute.  Have a good week.

Kooima Kooima Varilek Trading

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