Varilek’s Cattle Call: Nervous Markets

All the commodities are on edge with Ukraine being invaded by Russia. There is a lot of uncertainty that reigns with a news story like war. The grains moved higher with more opportunity to move grain to the rest of the world with Ukraine’s issues, but the underlying statement for futures is “uncertainty is always bearish.” That statement will provide some pressure on the livestock markets in my opinion.

Cash cattle trade was positive with $142-145 live trade across the country. Packers were a little more eager when it came to calling for cattle. The boxed beef did not perform very well, but that was expected for this time of year. Carcass weights had a correction lower for some positive news. Steer carcass weights were down 12 pounds and heifers down 6 for the week ending 2/12/22. Higher priced feed may keep cattle moving out of the feed yard quicker in the future. With old crop corn over $7.00, there will need to be more incentive to feed cattle.

With the shaky world news and threats of more war, it is time to look at your own bottom line. Speculating on inflation and some of the bullish fundamentals has been fun, but the risk of doing business just went up. Be careful and think through your market plans and needs. We all must try becoming experts in tough topics that can affect us, and it can be hard to sort through. However, you do know what market movements could hurt your operation. Also, we may know a key fundamental to the market, but if long funds decide to flee from the markets, fundamentals can take a back seat temporarily. Have a good week and good luck.

Scott Varilek, 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.