Varilek’s Cattle Call: Fresh record highs
What words can you even use to explain the cattle market? Our breath is gone with high cash prices and a futures market that makes moves extremely fast. Record prices bring stressful times even though they are good for producers.
A limit down feeder trade on July 31 was followed by several days of strength with fresh record highs. Then Friday, another limit down feeder trade of $9.25 finished the week. The reason for the break was not definite. Later rumors of screwworm came but were not verified by the close.
The market does not always need a reason once it gets on the run. Large margin calls can get trades to blow trades only to chase on the sell side once that is wrong. Emotions in trading can be high. The funds are significantly long the cattle markets. Will this be the time we see them shake loose? It was not the first limit down day, and the second limit down day will be the challenge next week.
Cash came in near steady for the 4th week straight at $245 in the north from a couple packers. Not everyone received the bid, but it was for 3 weeks out delivery. That delayed delivery would not even fit Labor Day demand which is head scratching. Seasonally we can see a cash high this week in August for the Labor Day demand but for immediate delivery.
We are left guessing to finish off another wild week. Cash feeders were notably higher, and the futures prices are acting goosy. What a time to be alive. The long-term cow herd growth is still in question with the high cost of starting up. Be careful and 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.
