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Weekly Cattle Call
2 - 20 - 2026
Cattle futures had a relatively quiet week.
Technicals all point to
gaps and contract highs. The market still needs to get fed with
bullish news to attain those levels. Asking prices are 250 in the north
with bids at 245 as of this morning.
There are a few potential market concerns
floating around today
causing the trade to get pushed into Friday afternoon once again.
The supreme court ruled Trump's tariffs to be unlawful. I think long
term this really wont be much of a market mover, as many tariffs on
beef have already been removed or modified in an attempt to lower
beef prices for consumers. However, these tariffs have been the
focal point in the Trump administration's trade policy. Traders will
have to deal with a new level of uncertainty as the entire policy is in
jeopardy.
The potential labor strike at the JBS plant
in Greely, Colorado is also
weighing on the market. Being the largest plant in the JBS network,
any reduction in capacity has the potential to negatively impact the
markets.
The Cattle on feed report this afternoon
shows estimates in line with
previous reports and looks friendly. Marketing estimates are lower,
reflecting the longer feeding periods and heavier finish weights
required to lower breakevens. The producer typically loses leverage
in these situations. There are a lot less cattle to pull forward when
they need to be 1600-1700 to breakeven. I anticipate packers to
move on this situation sooner rather than later.
When making an analysis and comments, we
do need to recognize
a NEW level of demand for beef products. Demand continues to be
extremely resilient, holding the market together.
Dallas Granstra
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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