Varilek’s Cattle Call: Spooks

The spooks of Halloween were in the cattle markets all week. It was a market that was hard to trade with a $60 break in feeder futures and $25 live cattle. This environment is extremely hard to dissect for anyone. All we can do is look at what is in front of us.

Cash feeders recovered quickly. There was a lull during the limit down days last week, but once the futures stabilized, prices came back strong. Breakevens on feeder cattle purchases were well above the board. I think finishers thought there would be better deals, but it was a true testament to the tight supply. There was no announcement on a date for opening the Mexican border. The left the cash market to move forward as usual. Nobody knows the exact plan on the border. It will be negative the market whenever a plan is announced.

Live cattle traded strong even with the volatile futures. The north sold quite a few cattle at $230 during the break while the south was firm at $235. Packers still wanted the cattle with future imports planned not hitting our immediate demand needs.

The United States plans to import some beef from Argentina, but Brazil is the bigger fish. Rumors are that a deal is virtually done. Brazil was our number one source of beef to start the year before the tariffs. Our demand structure is in need of grinding meat now. It will take years for us to re-establish sizeable beef numbers for slaughter.

News is changing quickly. Keep your head on a swivel. We know how much this market can break, so do not be afraid to use some floors. Yes, they are high, but they should be. Have a good week.

Kooima Kooima Varilek Trading

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