Varileks Cattle Call
4-26-24
It was the battle between
bird flu and cash cattle last week yet
again, and cash cattle took the victory. The story of avian bird flu
kept on giving with the interstate transportation rules with lactating
dairy cattle. There was a week of lull in the avian bird flu news, but it
appeared to ramp up again.
Testing for the disease
is new, so we do not know where we will all
find a virus that is on the books since 1880. My thought is, we will
find it in many places. Leftover dead fragments of the virus are
found in milk though it is completely safe to drink. If they are testing
milk, they will test beef cattle and meat until they find it as well in my
opinion. The good thing is, we keep hearing about it and there is no
threat to human consumption. We may see the market become
more immune to hearing about it. Just know that avian bird flu is not
going away with tests going to another level.
Cash cattle took the prize
this week in feeders and fats. Feeder
cattle prices were stronger than the previous week with a significant
jump in price in the north and south. Live cattle bids started at $182
in the south and rose to $187 in the north by the end of Thursday.
Some trade was renewed at $187 on Friday with packers short
bought.
Peak demand is right around
the corner, and it does not feel like
packers have a large lineup of basis contracts to exploit the market
in my opinion. Producers hold the leverage even with large carcass
weights on the diminishing yearling crop. May will be the gap as we
transition to new crop calves, so take advantage of a great basis
with a hungry packer.
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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