Snow

Varileks Cattle Call
10 - 30 - 26

The live cattle cash trade took the blame for poor futures action last week. Cash prices started the trade at $225 on Wednesday and fell to $218 on Friday before the packers said they were full. The northern show lists have been carried over form previous weeks with large fed cattle ready to move. Packers knew this and took advantage of the leverage.

We still have plenty of cattle ready to move in the north. In some cases, $218 will not bring back the initial cost of the most expensive feeders bought last year. I hope that not to be the case for many. Some of the packers are scheduling for delivery after Thanksgiving. That is the alarming part. Packers have inventory, we are caught with our seasonal fall run of cattle. Yard conditions are also illuminating the fact that producers want to sell. There will be more record carcass weights in the coming month in my opinion.

November can usually be a seasonal dip in demand until after Thanksgiving with the beginning of December as a time frame funds like to bottom pick. December feels like a long ways away after the near limit down close for feeder cattle on Friday.

The stock market did not aid in any optimism with sharply lower indices and stronger energy prices. Consumers could find tougher times if the volatility does not slow down. Take your pick on the outcome of the election, but we just want that behind us. Next week will start with plenty of uncertainty, but will hopefully stabilize with a new month and a more certain outcome. Have a good week.


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.