Varilek’s Cattle Call: Dog Days

Producers saw the seasonal end of August slow down from packers. Bids were harder to come by for fed cattle with some light trade of $230-232 dressed in the north. Earlier in the week the south did trade a few $142, but all the cash action was slow. Some of the regionals did not have a bid which dampened the mood, because they have been forcing the majors to pay up as of recent. I have been a broken record about the Labor Day buying pattern, but this year was right in line with the trend of good early August sales followed by the more stagnant feel.

Long term everyone still appears to be friendly due to tightening supply of the cow herd. That is also the broken record of the cattle chatter. However, carcass weights for the week ending 8/13/22 showed steer carcasses up 9 pounds and heifers up 8 pounds. Both of those levels were higher than year ago levels. Even with higher feed costs, we still had large critters on the market. That was surprising to me because the feedlots appear to be current. It may prove to take a little wind out of our sales in my opinion.

The fall runs of feeders look good for the cow calf producer. However, the cattle feeder will have a challenge with the higher priced feeders and volatility of feed costs. There is a lot of risk brewing for the feedyards so make sure you have proper risk tolerance moving ahead. The cattle on feed reports by the USDA have not showed us the bullish numbers hoped for yet. Drier conditions continued to pull calves off the cow early with some extra liquidation noted. 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.


Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User