Varilek’s Cattle Call: A few cattle sell
Cash cattle prices were noted steady at $122 in the north with some $124 in the south. The market was unable to see higher levels, but producers were able to continue the clean-up of cattle backed up on the showlist. Some packers were bidding for more than a month out, but others did schedule cattle for pickup within two weeks. It was no runaway, but the market will appreciate movement of cattle in a tighter window. October live cattle futures were able to rally with no deliveries posted in week 1.
The government hearings continued with Senator Chuck Grassley carrying the torch for the northern cattle feeding sector. It was good to hear the northern representatives fighting for our cattle industry, but after hours of talk I can see why the government has a hard time getting anything done. The issues in the industry have been evident for years, and we have asked for help with no major changes yet. A small independent family operation looks to be at the greatest risk for the future currently. However, I like some of the dialogue from government officials and remain at task to finding solutions.
Boxed beef prices are slipping from record highs but remain strong at $285 for choice boxes. I like the news I hear for beef demand, and some are calling for the product to turn higher again with excellent domestic and increased export news. The hide and offal also made notable increases as well.
Cow numbers are still tightening in the United States creating premium prices for deferred contracts. The industry feels better times are coming, but it is just taking longer to find our way there than expected. The increased prices create more risk so have a plan in place with your profitability in mind. Have a good 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.
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