Varilek’s Cattle Call: Sparse Cash Trade
There were a few more cash bids this last week, but compared to the week before, it did not take much. Producers were able to squeeze a few loads in ranging from $194-198 dressed and $123-124.50 live. Packers would only take small parts of the showlist and many were left with no bids again. The price was staying steady with the sloagan of charity bid being added to cash trade terminology. With an increased watchful eye on cash trade, the packer would not dare to buy cattle too much lower in my opinion.
The cattle on feed report might prove a little negative in my opinion. Placements of 102% were 3% higher than estimated. Drier conditions in cow calf country could be some of the reason for an increase here. On feed was also 1% higher than expectations with the marketings neutral at 100%. I do not think it is the ultimate market killer with the main problem of leverage still in the spotlight.
Futures prices have found themselves in a sideways chop with added premiums the farther out you get to entice cattle to stay on feed. Cost of gains might convince a producer to market cattle earlier which creates some of the premium structure. Individual producers were still the sector making the most noise trying to keep cattle moving. Choice boxes were still strong at $300 plus with domestic demand carrying the torch. The stock market was volatile with negative China economy news to further some uncertainty. 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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