I doubt any of us are fans of wild swings like we saw last week. It is tough to keep up with what story is actually moving the market. At these high levels, we may not even need a reason with nerves running high. Producers are handling more dollars than ever before with extreme risk if prices would quickly erode. It could just be respect for this high level.
The week started with record high futures prices. Wednesday after a push higher, the markets turned lower in a hurry. A $12.00 break in feeders ensued over the next sessions. Friday finally showed some recovery. It showed how nervous this market can act when it wants to break. Producers scrambled for hedge protection and forced prices lower with the panic.
Packers used the futures break to purchase cattle in the country by offering $1 higher than the previous week of all-time highs. The trade at $229 was impressive for the north, and the south came in steady at $220. Packers were buying for every week for a month out to try get some leverage back, and producers were willing sellers with the board on a sharp break. Demand remained solid during peak grilling season for an added desire for cattle.
One of these key reversal lower trades will be the big one, and nobody knows which one. The gray hair we get in the beef production industry is earned. Proceed with caution and have a good week.
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.