Varilek’s Cattle Call: Mixed Cash Cattle
Cash cattle trade last week depended on location and color of cattle. It was a wide range with the south trading from $118-$122 and the north from $127-$131.50 and dressed at $202-$209. The tale of two stories lived on with the shift of cattle on feed to the southern region. Midwest producers struggled to get bids even with tighter numbers.
We are seeing the shift in cattle placements with the fed cattle marketing numbers for South Dakota, Iowa, and Minnesota well below the 5-year average. The north is extremely current for the end of August and without a sweetheart deal, smaller family farms have a harder time competing to fill up the yards with feeders. The other factor to that shift is the high-priced corn. Feeders that also raise corn have the choice to straight sell it at a profit and take the money.
The Middle East turmoil adds an uncertainty factor to many of the markets. It should not affect the cattle markets in general but increasing world tensions can have an influence on markets. Demand remains rock solid despite growing covid worries and is holding better than expected even after a bulk of Labor Day buying is completed.
The futures market had a great start to the week but was unable to finish it off with a nearly steady finish on Friday. However, the open interest level showing some signs of life with funds looking to add some positions in the live cattle. More players is a good sign in a market that could use a boost in my opinion. 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.
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