Varilek’s Cattle Call: Changing trends, uncertainty
There are not many new developments this week in the cattle marekts. Boxed beef continues to receive positive feedback while holding stronger prices in my opinion. With the fall season kicking off, a bigger break was expected for boxes. I still like what I hear even without max restaurant business.
Cash cattle prices are sluggish with high expectations week in and week out, but producers can only get the needle to move by about $1 per week. Early $108 live talk quickly became $107 if you could even receive that bid. Packers are buying for 3 weeks out and continue to lock up inventory for the near future. Some cattle are going to be picked up by the packer earlier than anticipated, but they seem to be finding enough inventory to refill the end of the month slots. Showlists are not abnormally large and appear seasonally in line, however, there is a large shift in the last 3 years putting more fed cattle inventory in to the first half of the year as opposed to the last half. That is a trend worth noting and following.
Donald Trump has covid 19. Chalk that up to another random story that can have an affect on markets. I am not sure if that has any major weight on the marketplace, but it is uncertainty which is always bearish. Something to remember is, there is always a risk of some story coming out overnight that can send the markets limit down. Very rarely a story can come out overnight to move prices limit up. It is always a risk to remember as we extend ourselves on inventory in the yard. Producers are beat up enough, and even though many analysts are bullish, let us tread carefully. Have a great week.
Scott Varilek, Kooima Kooima Varilek Trading
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