Varilek’s Cattle Call: Sideways with a Twist of Uncertainty |

Varilek’s Cattle Call: Sideways with a Twist of Uncertainty

Cash cattle trade was noticeably softer with a short kill week ahead. The north saw some $145 live and $225-227 catching most of the dressed beef trade. The south did trade some $141 leaving us $1-3 lower week over week. Some packers were not participating but at least had a bid by the end of the week. Packers were saying they have cattle bought and contracts to pull from which is not out of the ordinary seasonally, however, some of last weeks cattle purchases have already shipped. In my opinion, the packers might be closer to the knife than they are letting on. Maybe I am talking my position, but that is what I am going with.

Increased worries are surrounding a possible invasion of Taiwan by China. The world unrest is not a new story, but this adds an element of uncertainty to the markets. If the United States is on the opposite side of China, many will view it as negative agriculture commodities. Lean hogs and grains would be two markets more reliant on China business. There is some beef business at risk but not to a large circumstance in my opinion. Domestic demand is the leader for the beef industry.

Grain prices are taking a break from the highs keeping feedyards watching for opportunities. Last year feed prices ate into a lot of profits of beef producers and many are antsy to find a safe haven from volatility. Harvest pressure along with some China news might provide an opportunity to make a better plan. There are no guaranteed winning trades available so know your risk level when making decisions. Have a good week.

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.


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