Varilek’s Cattle Call: Futures finished with a blood bath
The cattle futures finished with a blood bath from the record highs just weeks ago. The board of trade was limit down feeders and fats Friday with mainly political reasons to blame. Beef prices have made the headlines as high, and it was promised to be fixed.
Increasing beef imports from Argentina was one solution offered by our government. Argentina has better quality beef than Brazil but not enough supply to make a large dent in my opinion. After moving on from that story, Donald Trump put out the message that made many cattle producers angry. I will leave that alone for you to decide. There was also plans being made to meet with Brazil over trade relations.
Thursday afternoon the headline came out with plans for the Mexican Prime Minister to travel to the states to talk about the border. There were no details of a border opening, but the market price in the possibility quickly.
The cattle market is on the run leaving most of us gasping for air. Dropping from the highs this fast can be what makes funds and longs jump ship. Cash feeders even followed lower with the limit down trade. This much uncertainty in the market does not create easy conditions for protection. Be extremely careful. We are at the mercy of what announcements come out of Washington D.C. for the time being. 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.
