Varilek’s Cattle Call: Sideways market

It has been a long time since I could report on a sideways market. Volatility was noted but on a much smaller scale. We had a week for everyone to catch their breath.

Cash was quiet with some $230 trade in the north while the south was nonexistent. I am not sure what price the formula traders used for cash with only a $233 call in bid to my knowledge. Boxes have been dropping fast which kept the packers light on their orders. Fort Morgan also planned to be down for 10 days but did get some help from added Saturdays in Skyler. Shackle space should still be plentiful in my opinion even with a plant down. Tight numbers will stay the theme for months ahead.

Seasonally the north has more supply, and it does appear so. However, producers have cattle fat that make a lot of money. They are choosing to be willing sellers which will keep us current in my opinion. If we can get current throughout October, the fourth quarter might have some great possibilities.

Cash feeders keep leading the charge higher. I am noting six weeks of purchases that do not even breakeven with the board. I say this, because if we do not get a rally, we will have some nervous cattle feeders with losses in front of them. That should keep the daily swings active, and if a catastrophic event happens, a break could happen quick. Have a good week.

Kooima Kooima Varilek Trading

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