Varilek: Let’s see the deals
The cash market traded around $105 live for the week. Thursday was the day that most of the trades happened, and I will call that sloppily steady. Some feedyards were asking more around the $106-$108 mark. The cattle on feed report was a touch negative but mostly neutral in my opinion. A big placement number is the only number that may shuffle some contracts around pricewise, but it is not like a cow just though an extra calf on the market. Placements were 109 percent versus a 106 percent estimate, on feed was 104 percent versus a 104 percent estimate, and marketings of 97 percent versus a 97 percent estimate.
I applaud Senator Deb Fischer of Nebraska for introducing a bill addressing cash cattle trade. In the proposal she addresses increasing negotiated cash trade and clearing up cash transparency issues. First, the fight to create more cash negotiated trade continues. She addresses increasing cash trade regionally with a mandatory minimum. Second, there is a struggle finding out what prices are being traded on formulas versus printed negotiated trade. This is in line with policy that the Iowa Cattlemen’s Association pushed for transparency. If the negotiated trade is printing their deals, then let us see them all. Most cattle trade is done through formulas with premiums built in that are held secretive. There will be much more to come regarding this, and my first take on the bill is a win for the northern family feeder.
Demand news sounds positive with an expectation of boxed beef to move higher. The choice boxes are on a downward correction but are holding at a level higher than I anticipated. Slaughter levels are still on good pace with packer margins well into the green. Keep the grills going if possible and have a great 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.
Outtagrass Cattle Co cartoon by Jan Swan Wood for the Aug. 13, 2022, edition of Tri-State Livestock News
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