Cattle call by Scott Varilek: Volatility remains
The cattle industry remained volatile on the futures and cash forefronts. Cash bids from $153-$160 were spotty in the country, and cattle movement through the showlists remained slow. The cattle futures found themselves with pressure in the front due to lack of positive cash news. Deferred contracts held a more stabilized range siting post virus optimism.
Boxed beef continues to rally at record prices nearing $300 for choice boxes. One question the industry is wanting to know is why the big difference between cash cattle and lofty boxed beef prices. We hear you and share in your frustration. The cattlemen would love to have a bigger piece of the pie, but we will need a more stable chain speed at the packing plant for starters. A continued push for more negotiated cash is still at the front of many cattle organizations for a longer-term fix.
The cattle on feed report released April 24 showed friendly numbers in my opinion. The on feed number was in line with the estimates at 95 percent. Placements for March were 77 percent versus 80 percent estimate which was believed to be the smallest in report history. Marketings printed at 113 percent versus a 112 percent estimate. I was nervous of too much optimism on pre-report estimates, but it proved to be true. The report was a ray of hope, but the packing plant woes may still run the futures market in the foreseeable future.
Stay in touch with your cattle producer group of choice and help with finding solutions. We have a lot to vent about so stay focused and know we are in this together. Stay safe farming and God bless.
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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A short essay by Justin Tupper, Vice President, United States Cattlemen’s Association