Varilek’s Cattle Call: Hedgers wondering what to do
How can you make heads or tails of the wild swings we saw the cattle markets last week? To start the week, long positions were scared and thought the big break was coming. The last half of the week was won over by higher cash trade, tariff delays, and a futures strength. Then the hedgers were wondering what to do at the end of the week.
Tariff wars have been at the front of the headlines with the “on again” “off again” rumors. All agriculture markets were affected by the news changes. Currently tariffs for Mexico and Canada are delayed another month to April, and the markets are recovering some of the earlier losses.
Cash cattle trade started Friday morning with $198 bids and quickly rose as high as $203 live. Packers have sat on their hands but showed up in full force with spring demand around the corner. Major packers were leading the charge. That is the way you like to see it. Seasonal cash highs can happen in the second and third week of March, so here we go. Be ready to keep cattle moving.
Trading markets this volatile can be a challenge. Taking a position needs to be carefully thought out and your risk tolerance should be adequate for the trade. Do you want to lock in a position or not? Trading in and out is playing with fire. We have good prices in front of us. That gives us plenty of opportunities to look at. Just be sitting down when you get your LRP and put quotes. 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.
