Varilek’s Cattle Call: Feeder prices continue to surpass expectations

The futures traded sideways in a choppy fashion for the week. The slide lower ended, but it was unable to finish with a strong rally either. A market near record highs kept the volatility with nervous traders at these levels.

Cash live cattle were steady in the south at $240. The record low placements for the last 6 months has found its footing in the cash market for Texas. The north was a little sloppier with steady to lower trade. Prices ranged from $236-$237 mostly, but were better than initial worries of severely lower cash for northern producers.

Cattle are seasonally available in the north, so it does not feel alarming as in years past. Packers will use the leverage and also help us make them big. They need the pounds with the decrease in production and tariffs on Brazilian beef. Brazil was our number one source for grinding beef among the imports. That number is dropping significantly. USA chants can be heard with that alongside a closed Mexican border.

Cash feeders are still proving to be strong. Prices continue to surpass expectations with breakevens on calves falling in the $240 range. We do not have a futures market even trading that high. It will be scary to be open waiting for a price to lock in. If it does not come, be careful. Traders that know how to handle a loser are the wisest to me. Anybody can handle a winner on an uptrend. Have a good week.

Kooima Kooima Varilek Trading

The risk of loss when trading futures and options is substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.