Varilek’s Cattle Call: Winter Weather
The cash cattle market kept the theme of slow steady cash trade. Packers were not up and down the road cleaning up cattle. The northern showlists grew as the winter weather subsided, and producers were looking to just get cattle moved. Whenever the north negotiators are in selling mode, packers love to keep the cattle backing up to give them more leverage. The tolling weather made some northern producers want to just get cattle out, but the south looked to have a smaller showlist. Prices were $155-156 live in the south with $250-252 dressed and $158-159 live in the north.
Anticipated carcass weight breaks showed up again Thursday. The USDA numbers showed steer carcasses down 5 pounds at 915 versus 928 a year ago. Heifer weights were also down 5 pounds at 839 versus 855 a year ago. Yard conditions will probably be a factor throughout the spring keeping weights well below year ago levels in my opinion. High priced feed stays a factor in moving cattle as well. Just beware that some packers are not picking up cattle very quickly in some instances. It is their way of getting more pounds on cattle and can be frustrating.
The January USDA grain report did show a smaller than expected crop for 2022. Corn and soybean prices reacted to the upside with a range bound rally. There wasn’t any breakouts technically on the grain markets yet. It will be a question moving forward if the grains can keep grinding higher. In my opinion, the news could be quieter moving forward up until planting. Corn basis stays strong, but news of a break is in the rumor mill. Ethanol margins are being squeezed and many plants are running much slower. If the ethanol industry starts to lower basis, the rest of the market will follow.
My voice is finally back after being in Frisco, TX, so feel free to give me a call. Go Jacks and have a good week.
Scott Varilek, Kooima Kooima Varilek Trading
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