Varilek’s Cattle Call: President Who?
Cash trade in the north finally caught the south with $107 trade in Nebraska. That trade is not up and down the road yet but was a good sign of recovery for the north. Dressed bids had not joined the trend higher as of Thursday with only $165 evident. Packers were still buying for three weeks out trying to keep a finger on their inventory needs. With outstanding weather and a packer keeping cattle in the yards, the carcass weights have not been signaling the feedyards are becoming current. If fed cattle were excessively big, the packers were threatening discounts.
Election day came and left with all the hype delivering a confusing finish. How did the markets react? First off, the stock market continued a sharp rally and the United States dollar was weaker. The world stock prices trended sharply higher aiding in the market rally. Agriculture prices had a good finish as of Thursday with the weaker currency trade and dryness in South America. The world was still looking to the United States for soybeans and corn. As corn prices climb, it poses a threat to feeder calf prices but could be part of the fix to the large carcass weight problem.
Boxed beef prices are climbing seasonally and are seeing adequate movement. It is yet to be seen how a possible new President will handle Covid 19 regarding restaurant business. Clarity is not a luxury we have right now, but in my opinion, cattle prices are historically low enough to ward off any major corrections lower. We continue to see many heifers heading for the feedyards and not back to the cow herd. Light heifers were said to be the buy of the week with a notable discount in the salebarns lately. Have a good week and thanks to all those who voted.
Scott Varilek, Kooima Kooima Varilek Trading
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