Varilek’s Cattle Call: South and North Disparity
There is still a noticeable difference between live cattle cash prices in the north versus the south. The north is current while the south is lined up looking to move fed cattle. For the first time in years the north has action by all packers in the country bringing back more ease of negotiating cash cattle. The disparity is when you talk to somebody in the south about the cattle market. Traders and cattlemen in the south are giving a bearish tone.
There has been a large incentive to feed in the south with the increased use of formulas and premiums. Maybe now with many the cattle shoved down there with emptier yards in the north we will see a slight change. Markets do tend to fix themselves like the saying, “high prices cure high prices.” That is a long term thought that might not be worth the dirt on the bottom of your boots, bit I wanted to throw that idea out there. We have feeder calves and corn in the north, so it only seems fit that we find a sustainable way to be beef producers up here.
Grains continue the increased volatility with more precipitation to note. Big July rains usually have a negative impact on markets but are a great boost to crop size. The forecast does not appear to be as ugly as the June heat. Grain demand got us to the higher prices so the correction lower will be looking to where that kicks in to gear again.
I hope you all had a great 4th and keep those grills rolling. Demand for beef may be slowing seasonally so that does not alarm me. The disturbing part is the high prices in the retail store may have over-priced themselves for the moment against competing protein. There may be some higher prices boxes that need to move through the system before a correction comes. Have a good week.
Scott Varilek, Kooima Kooima Varilek Trading
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