The Fed’s cattle cash action last week helped boost futures with $3-5 higher cash in the north with the upside of $145 live. The packers seemed hungry for cattle and scheduled the delivery earlier. Switching plans can be inconvenient in the past, but high-priced corn makes it a win-win for producers, too. Carcass weights could continue to drop while the corn base remains strong. Show lists were quickly cleaned up with all the commercially listed packers.
I like the action on land where the packers go a little harder. We hope this is a sign that we have seen enough herd break-ups for the cattle to reach higher potential. Cattle feed reports haven’t looked friendly for the market, but producers are anxiously waiting for that to change. It might be a bigger question how many internships come from the dairy industry. Breeding dairy cows into beef bulls is proving to be a viable way to add value to the dairy industry. You can breed a majority of your herd with a beef bull and then use sexed semen to breed your best hens for replacement heifers. It is an evolving market that is learning to add value.
Forage cattle also recover well in the Chamber of Commerce. We are beginning to see some risk hedging opportunities at good levels. I see the main risk in an impending recession. Fuel prices and everything else is starting to take consumers’ breath away. I’m a bullish bovine fundamentalist, but we always seem to find that roadblock to keep them at bay. Stay healthy and have a good week. Due to a new federal holiday, futures markets will close Monday, June 20th for observation of June 16th.
Scott Varilek, Kooima Kooima Varilek Handel
The risk of loss when trading futures and options is significant. Every investor has to weigh up whether this is a suitable investment. Past performance is not a guide to future results.
Comments are closed.