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Varilek’s Cattle Call: Boxed beef holding firm, economy biggest risk

Northern cash cattle trade led the news again last week with a rally on Wednesday.  Bids starting at $180 ended up at $183 with dressed trade in the mid $280’s.  The dressed bids have been lagging against the live prices this year, but I would note that the cattle being slaughtered have showed an increase in yield.  The south tripped early in the week for $170-171 which reigns in the futures from really exploding.  Southern cash has not performed with the lack of negotiated cattle.  The futures market will be more geared for that south trade versus our higher prices.

Boxed beef is holding firm around $300 choice during this peak demand season.  It is the overall economy health that will be the biggest risk moving forward, and we are having our fair share of negative news.  The word recession is circulating and has been since 2020, so at least it is not a surprise.  Markets should have had plenty of time to digest that making a possible break less severe in my opinion.

Dry weather forecasts for the coming weeks pumped some premium into the grain markets in the end of this week.  It is the first friendly story that corn and soybeans have been able to talk about for a while.  Weather markets are very hard to trade, so I recommend you stay sharp.  Be ready for an increase in volatility moving into the growing season.  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.