Varilek’s Cattle Call: Feed Costs in Question 3-31-2022
Kooima Kooima Varilek Trading
The hog and grain markets stole most of the attention last week with bullish reports noted. Corn saw an acreage number well below the pre-report estimate. December futures managed to trade limit up at $6.91 briefly but did settle slightly below that. With feed costs in question, this will add to the uncertainty of what to price feed in the bunk. Weather watching will be next alongside Ukraine and inflation.
The hog fundamentals continue to look at a tighter supply. Chronic disease is a major issue with producers. The smaller herd has been frontline news to start the year and was verified by the hogs and pigs report on March 30. The futures market had near record high prices penciled in and had a wild trading day after the report. Markets can top when the news is the best, so we saw a $3.00 higher open turn into a $3.00+ lower close.
Cash cattle hung steady at $138 with the south tripping at the first bid. This was disappointing to the market in my opinion with the futures expecting a better charge. Grilling season is around the corn and what is typically a seasonal high timeframe for cash is very steady. I still attribute this to the lack of negotiated cattle. The cash traders that set the market for the formulas is too small to move the needle when demand is great.
There is a new bill introduced covering some of these issues in the cattle industry, and the northern cattle organizations are getting on board with it. It follows years of debate and will still drag on in the fighting ring. The individual family farm operations need to stay involved for the future of the business before it turns into the chicken and hog industries. Have a good week.
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