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Varilek’s Cattle Call: Fund Volatility

Last week we saw one of the wildest agriculture futures markets in history. Thursday all the grain markets along with the livestock took a large daily hit with limit down corn and hogs. July soybeans trade a full $1.20 lower on the day. The funds were swiftly exiting the commodity markets with rumors of governments intervening to try to slow inflation. The FED mentioned raising interest rates in 2023 and China was in the news regarding stopping prices as well. I do not have a report on China, but when markets are that volatile, they get thrown in the mix automatically.

Friday was recovery day for the grains and cattle with sizeable trades. The drought story took the lead role in the news again and will for the foreseeable future. Every rain pattern and forecast will be monitored making the Sunday night grain opens wild. It is important to trade within your means and be sure to keep a cool head when making marketing decisions.

Cash cattle saw a $2 boost with $124 live trading in the north. The cash market is still spotty for the individual cash negotiators, but the north also appears to be current. Carcass weights are still close to year ago levels, but I anticipate that margin to widen with the heat and higher feed costs. Feeder calf prices look to be recovering with great early trade in the sale barns and videos.



We saw contract highs in the livestock last week before the fund collapse. Optimism is still there with Senate hearings and the USDA looking into the Packers and Stockyards act. Producers are ready for a breath of fresh air, and hope to be able to enjoy the great beef demand while it is still hear. 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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Varilek's Cattle Call

Varilek’s Cattle Call: Take my bid, or…

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It was a mostly uneventful week with futures prices slipping from the contract highs that were recently placed. Cash was sluggish with a $1-2 lower feel. The confidence in $125 trade was not apparent. The…



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