Varilek’s Cattle Call: Election Week
The cattle finally saw some recovery last week with a $5 rally from the lows. The cash news slowly recovered as the week progressed. Producers were not out doing cartwheels with all the good news as it still was a struggle to get bids. Large fat cattle have not been cleaned up in the north enough to warrant much higher trade. Weather has been perfect, and corn was cheap and abundant. In the future, when packers start to clean up some of the heavy cattle, we should be near the low. Packers have been buying cattle and leaving them sit in the yard for weeks. That has continued to keep any leverage from the producers meaning feedyards in the north could not clean up cattle even if they wanted.
Rumor is there is an election coming up. All the traders are jockeying for position and increasing the volatility ahead of this event. Uncertainty prevails when it comes to such an issue with traders unsure of what happens upon certain outcomes. I cannot give you the direct answer on what happens with the different outcomes of an election and nobody probably can. Regardless of the winner, traders will have a clearer consensus of what to expect, and everybody can try unwinding the tension.
Things we do know are grain demand is good, beef demand is adequate, and the feedlots are not super current. Let us try make decisions with a sound mind and look for opportunities during the market swings. Feeder calves are seeing an uptick in prices as farmers hit the salebarns with an abundance of feed. Go vote, and I cannot wait for it to be over.
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